''But it's given me a very healthy dose of cynicism in investing now,'' he said yesterday.

The cynicism is not only born of the $7 million loss sustained by De Bortoli Wines. Mr De Bortoli also said he was personally misled before he decided to buy 23 million HIH shares for the family company progressively through 2000.

Last week, the company launched legal action in the Federal Court to recover the $7 million.

The allegation that the loss was caused by HIH's misleading or deceptive conduct relies on both published financial statements and personal conversations recalled by Mr De Bortoli.

The statement of claim says that on October 25, 2000, Mr De Bortoli met the late Randolph Wein, then a director and later chief executive, who said HIH was ''a damn good company'', ''profitable'' and ''adequately reinsured''.

It is also claimed that on the same day, HIH's general manager public affairs, John Clarke, told Mr De Bortoli: ''Buy shares in HIH it is a good company - good profits and is undervalued.''

De Bortoli Wines' prospects of recovering the money depend on its misleading conduct claim being put on an equal footing with other unsecured creditors.

Its proof of debt was rejected three weeks ago by the HIH liquidator, McGrathNicol partner Tony McGrath.

Mr McGrath declined to comment yesterday but the statement of claim says the wine company was told ''there is insufficient evidence that it is a true liability of the company''.

The statement of claim says Mr De Bortoli relied on 11 statements to the stock exchange by HIH between March and December 2000, which were repeated in seven reports by stockbroking analysts.