The woman often chased for her ability to make deals now finds parts of her empire being pursued for outstanding debts. 'Chen is seen as someone who has very significant assets. But we could not find them,' says Ryan Eagle, the receiver of MAP Marine, a small Melbourne-based ship broker that was wound up last May. Among companies that owed MAP Marine money was Pioneer Freight Futures, a Hong Kong-based company wholly owned by Chen.

The futures company, which was incorporated in the British Virgin Islands, traded derivatives based on the fluctuating costs of hiring a ship. Pioneer Freight Futures was liquidated by courts in the British Virgin Islands and Britain last December.

Two people who have seen Pioneer Freight Futures' books said it had US$500 million of debts outstanding. MAP Marine is owed US$10.2 million by Pioneer Freight Futures, according to an October ruling by a British Virgin Islands court.

Eagle said he still hadn't recovered his client's money from Chen's company.

The liquidation of Pioneer Freight Futures was followed in June by the winding up of Pioneer Iron and Steel, another BVI-incorporated company owned by Chen that was based in Beijing. Pioneer Iron and Steel, a trading company, is in provisional liquidation in Hong Kong, where it also had operations and assets. Pioneer Iron and Steel was the parent company of Pioneer Freight Futures; according to a person familiar with the situation, the parent firm has guaranteed trades made by the subsidiary, linking the two companies' fortunes.

Pioneer Iron and Steel itself owes creditors, including BHP Billiton and Perth-based miner Mount Gibson Iron, US$516 million, according to legal filings.

Chen (pictured) was born into a high profile family on the mainland and is a part of a politically connected group known as princelings. She went to university in the United States and returned home in 1995 with an MBA from the New York Institute of Technology. Then aged 25, Chen founded Pioneer group with her mother, Lu Hui, to import iron ore into the mainland. Chen's timing was perfect. She tapped her family connections with Beijing's biggest steel mills to become an indispensable middleman. According to the Britain-based International Steel Statistics Bureau, China's steel production more than doubled between 1995 and 2005 to account for 28 per cent of the world's total. In August 2007, Chen said that by 2003 she was importing one-fifth of the iron ore going to the mainland.

'Diana was a successful guanxi merchant, organising the trades and taking a healthy margin off the top,' the former head of a global mining giant's Hong Kong office said. 'In the 1990s and early parts of this decade, we could not do business without her.'

At the height of her business career she tried to mount a hostile HK$6 billion takeover of Hong Kong-listed steelmaker China Oriental Group. The bid was knocked back.

Business associates describe Chen as a modest dresser. Another called her a charming negotiator. She is also well-connected in Hong Kong.

It was in Hong Kong at 9.30pm on June 25 when her corporate empire took an unexpected turn. According to minutes of a meeting, Chen sat in her sixth-floor office in Southern Garden, a nondescript skyscraper in Wan Chai, and voted, as chairman and sole shareholder, to put Pioneer Iron and Steel into liquidation.

Repeated telephone calls were made to Chen but she declined to be interviewed.

On August 3, the two firms of liquidators appointed to reorganise Pioneer Iron and Steel in the British Virgin Islands, Zolfo Cooper and FTI Consulting, applied for the company to be wound up in Hong Kong as well, because it had assets and staff in the city. Pioneer Iron and Steel went into provisional liquidation in Hong Kong on September 23.

In the August 3 petition, Zolfo Cooper and FTI said Chen 'who is a well-known public figure both in Hong Kong and in China, and considered to be the key person in respect of the operations of the company, has rejected the petitioners' requests for information and an interview'. They further stated that Chen 'claimed she does not have any document or information about the company'.

In a separate case in Britain related to her other company Pioneer Freight Futures, British High Court judge Christopher Clarke said Pioneer Freight Futures representatives 'have neither appeared [in court] nor adduced any evidence'. Clarke added that Clyde and Co, Pioneer Freight Future's solicitors, 'indicated they were without instructions'. That case involved a Norwegian shipping company named AS Klaveness Chartering, which sued Pioneer Freight Futures over US$10 million it claimed it was owed by the derivatives company. The judge ruled in favour of AS Klaveness on December 18, the day Pioneer Freight Futures went into provisional liquidation in London.

Just three years earlier, Pioneer Iron and Steel was riding high when it went after China Oriental with its HK$6.33 billion takeover offer. The vehicle was Smart Triumph Corporation, a wholly owned unit of Pioneer Iron and Steel. In the offer document, prepared by the Hong Kong office of Australian investment bank Macquarie Group, Chen described Pioneer Iron and Steel as a company that, in the year to March 31, 2006, had sales of HK$4.7 billion, a HK$477 million net profit and had HK$4.27 billion of net assets. These assets included 66 per cent of a Guangdong steel plant, which the offer document described as covering 300 hectares and having the 'capacity to produce around two million tonnes of [steel] billets a year'.

In a related document filed to the Hong Kong stock exchange as part of the takeover, Chen said Pioneer Iron and Steel owned 12.1 per cent of Shanghai-listed Inner Mongolia Baotou Steel Rare-Earth. In its latest annual report released in March, Inner Mongolia Baotou Steel Rare-Earth said a foreign-invested entity named 'Pioneer' held 9.95 per cent of its shares. At present valuations, that 9.95 per cent stake would be worth 6.917 billion yuan (HK$8.08 billion). At the time of the 2007 takeover bid, Pioneer Iron and Steel already owned 28 per cent of China Oriental, and Chen was the company's vice-chairwoman.

The takeover attempt was defeated after China Oriental's chairman Han Jingyuan led a spirited defence. Chen then sold Pioneer Iron and Steel's stake in China Oriental to Indian steel baron Lakshmi Mittal for US$647 million.

The picture of Pioneer Iron and Steel painted by the accountants now handling the company's affairs, Zolfo Cooper and FTI, is markedly different to the thriving business that tried to buy China Oriental.

According to the August Hong Kong winding-up petition, the only hard assets left in Pioneer Iron and Steel are two 2007 Nissan Elgrand cars worth HK$600,000. The company has HK$8,000 in cash, which is in a Standard Chartered bank account.

The petition said other assets include 100 per cent of a business named Long King International, 100 per cent of Pioneer Freight Futures, the Chen derivatives company that has also been wound up, and 35 per cent of Zhuhai YPM Pellet, a joint venture business manufacturing steel pellets in southern China.

Brazilian diversified miner Vale, the world's biggest iron ore producer, owns one-quarter of the Zhuhai company. Vale bought its stake in Zhuhai YPM from Chen in 2008, valuing the company at US$16 million.

In the August petition, the liquidators added that a number of assets were 'recently transferred out' of Pioneer Iron and Steel. These included Grandmaster Fortune, an investment holding company through which Pioneer Iron and Steel holds 15 per cent of Australian Stock Exchange-listed mining explorer Accent Resources. That stake is worth about A$6.5 million (HK$50 million).

Another asset that is no longer in Pioneer Iron and Steel, the liquidators say, is the company's shareholding of Smart Triumph.

In the August petition, Pioneer Iron and Steel's liquidators conceded they didn't know whether the asset transfers happened before or after the company was wound up in the British Virgin Islands in late June.

In Hong Kong and the British offshore territory, it is not a criminal offence for directors to move assets out of insolvent businesses, says Graham Ridler, a Hong Kong-based insolvency partner at global law firm DLA Piper. But, he adds, liquidators in both territories are allowed to seize assets that directors have moved out of insolvent companies.

While the circumstances surrounding Pioneer Iron and Steel's winding up remain unclear, those related to Pioneer Freight Futures' plunge into insolvency are more apparent. According to a former Pioneer Freight Futures employee, two derivatives brokers who dealt directly with the company and a person who has viewed the failed trading outfit's books, the company was simply caught out by the shipping industry crisis of mid-2008. Between May and December 2008 ship owners were battered by a combination of falling consumer demand for goods, reduced mainland demand for commodities and banks' weakened ability to lend money to importers.

As an iron ore importer, Pioneer Iron and Steel was a big user of charter vessels.

But Pioneer Freight Futures had mostly placed bets that the costs of hiring ships would rise throughout 2008.

Pioneer Freight Futures didn't lose bets with all its counterparties, a person with knowledge of the company's trades said. 'The company did make some wise short trades. But, very sadly, many of its debtors went bust, causing a massive cash-flow crisis.' 'Pioneer Iron and Steel had provided parent guarantees for Pioneer Freight's trades,' the person said, directly tying the parent to the fortunes of the derivatives unit.

Andrew Hosking, Pioneer Freight Futures' London-based liquidator, declined to comment. Zolfo Cooper and FTI also declined to comment.