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Former New Zealand First MP Brendan Horan has claimed that Mr Peters failed to declare that he part-owned a 5 year-old mare called Bellazeel, which had earned prize money of $20,175 in the last year.
Mr Peters, a former Racing Minister and New Zealand First's racing spokesman, told reporters this afternoon that he no longer had a share in the racehorse.
He also said that it was no longer racing and had been "put out to pasture".
The New Zealand First leader said he bought it as a donation to a charity before he returned to Parliament in 2011.
He could not confirm when he ceased owning the horse, but said it was after he became an MP again.
Asked why he did not declare the racehorse in the register of pecuniary interests, he said: "There is no pecuniary benefit, quite the reverse. You don't have to declare what could have been. There was never any benefit, it was all loss. It was a liability."
Mr Peters said it "cost him a fortune for a minor share" and lost him "a lot of money".
MPs must declare all property, directorships, gifts, shares and any other interests each year, regardless of whether they are profitable.
Mr Peters said part-owning a racehorse was different to being a director of a company.
"You're not talking about the same thing. If you look at the declarations, they are all over different descriptions.
"If you are trying to say that somehow I was not involved in full disclosure, you couldn't be more wrong. They don't say [to] declare all your losses, do they?"
Asked what charity he bought the horse for, he said: "I suspect I've forgotten. They put it up on an auction and I said 'I'll be up for that'."
Mr Peters declared a company directorship, two properties, two blocks of land, a superannuation scheme and overseas travel in the latest returns, which were published last week.
Mr Horan's allegations come a day after Mr Peters acscused Justice Minister Judith Collins of failing to declare all of the details of her trip to China.
Mr Peters argued that Mrs Collins should have publicly disclosed Chinese Government hospitality she received during her October trip to Beijing.
The Chinese Government's support for the trip was disclosed to the minister's Cabinet colleagues in a confidential report.
Mr Peters said Mrs Collins' case was not comparable to his own case, and he stood by his belief that Mrs Collins should have been sacked by Prime Minister John Key this week.
Mr Peters was censured by the Privileges Committee in 2008 for failing to declare a $100,000 donation by businessman Owen Glenn.