'Steel princess' fails to avoid court
Hong Kong's High Court has rejected an appeal by Diana Chen Ningning, granddaughter of a former mainland minister, in which she sought to avoid answering questions in court about her defunct company Pioneer Iron and Steel Group.
As a result, Chen, nicknamed 'the steel princess' and one of China's richest women, will be questioned in the High Court next year by the provisional liquidators of Pioneer and their lawyers, said one of the two liquidators, Roderick John Sutton.
'We want to know why the company was once very profitable and asset rich, but all of a sudden, it allegedly had no assets,' said Sutton, Asia Pacific chairman of FTI Consulting, a business advisory firm.
Previously, Pioneer, an iron ore trading firm, had more than US$600 million of assets, said Sutton.
'We will be asking Chen about the formation, promotion and management of Pioneer and the transfer of assets out of the company,' he said. 'The transfer of assets is very crucial. We will be asking her about the former and current assets of Pioneer.'
Chen and her attorneys could not be reached for comment.
Last year, the High Court ordered Pioneer into provisional liquidation.
It owed over US$516 million to creditors, including Anglo Australian mining giant BHP Billiton and Standard Chartered Bank.
Chen and her mother, Lu Hui, jointly ranked 72nd on the 2010 Hurun China Rich List with an estimated wealth of US$1.7 billion.
The 40-something Chen is a granddaughter of former metallurgy minister Lu Dong. There was 'abundant evidence that Chen had demonstrated a lack of willingness to co-operate with the provisional liquidators,' said the judgment by Justice Joseph Fok and Justice Arjan Sakhrani. 'Instead, the history of the proceedings showed she wished to avoid an investigation of the company and her responses to previous questions were woefully inadequate, vague and less than candid.'
The judgment was made on December 15 and the reasons for the judgment given on December 21.
On June 16, Justice Jonathan Harris agreed to an application by the provisional liquidators to question Chen on Pioneer in court. Chen appealed twice against this but failed.