Citic Financial Leasing (Citic FL) is said to have cancelled a contract for five 65,000-dwt bulk carrier newbuildings that it inked two months ago at Dalian Shipbuilding Industry Co (DSIC) worth $157.5m. One shipping source said recent rate falls in the dry bulk market and the “disappearance” of the bank’s global shipping head Guo Fangmeng (Bill Guo) were the two factors behind the order termination. Citic FL officials were not contactable. A source familiar with DSIC confirmed that the five-vessel order had been “stopped”.

News of Citic FL booking the quintet was first published in TradeWinds in August. Then, the company was reported to have returned to DSIC for the ultramax vessels, lifting the number of the ship-type there to 15. The company’s earlier 10 newbuildings were ordered in April. At that time, Guo confirmed the project but played down the deal and said no contract had been signed. He said the demand for bulk carriers was strong as the Chinese domestic bulker market had been neglected for 10 years or so because Chinese owners had focused on the international flag-of-convenience trades.

Guo said the 65,000-dwt bulk carriers would be under the Chinese flag and for domestic trade, but they would also be technically and legally eligible for international trading. Citic FL was reported to be paying CNY 200m ($31.5m) each for the SDARI-designed vessels. Shipbuilding sources believed Citic FL will not terminate the DSIC contract for the remaining 10 ultramax bulker newbuildings, as five of the vessels were chartered out to Fujian Guohang and the other five to Zhejiang Shipping. DSIC has assigned its subsidiary shipyard, Shanhaiguan Shipbuilding, to build the 65,000-dwt ships. They are slated to be delivered in 2024 and 2025.

Citic FL was launched in 2015 but is a newcomer to shipping. It hired Guo from ICBC Financial Leasing in April last year to spearhead its shipping portfolio. The Chinese leasing company was recently given approval by the state to set up foreign special purpose vehicles for its dollar-denominated assets through its Tianjin office. The approval means it can carry out newbuilding contracts in dollar-based deals and that the ships can be registered under flags of convenience and chartered out to foreign shipping operators.

Last month, Guo was reported to have been “taken away” for questioning by officials from China’s Central Commission for Discipline Inspection. His was the latest in a series of detentions of shipping bankers under China’s anti-graft campaign in the finance sector.