An unapologetic Bruce Sheppard has hit back after revelations he agreed to pay a record cash settlement to businessmen Mark Hotchin and Eric Watson in a defamation case.

The men sued Sheppard, an advocate for shareholders and now an associate member of the Financial Markets Authority, for $7 million for statements made on TV and radio in late 2009.

The Herald on Sunday reported last week the pair had accepted a retraction and "substantial" six-figure payout, believed to be the biggest defamation settlement paid by an individual in New Zealand. Sheppard says there was a breach of confidentiality by someone privy to details of the settlement in revealing that fact.

Hotchin was a director of Hanover, and Watson a major shareholder.


Sheppard had expressed "regret" at any inference of criminality, but emphasised this weekend: "The statement did not include an apology for the alleged defamatory statements."

Arguments were due to be heard on the case last month, but instead Hotchin and Watson offered to settle.

"Why did I settle rather than fight on? It is not my fight," Sheppard said. "Defamation proceedings are complex and expensive and not the right venue to air what happened at Hanover. While the preparation for trial has been gruelling it has not to date affected my business interests or my family. A trial would affect both."