The witness codenamed Person Four, on his fourth day of defamation trial evidence, spoke about a dinner he had with the war veteran in Brisbane's Moo Moo Bar and Grill in 2017.
Mr Roberts-Smith offered advice about completing an MBA and discussed their shared 2010 Battle of Tizak experience in Afghanistan for which the war hero was awarded the prestigious Victoria Cross, Person Four said on Thursday.
He earlier said "both of us did as much as each other that day," and he felt hurt he was awarded a medal of gallantry two years after his comrade.
The former elite soldier was asked by Arthur Moses SC on behalf of Mr Roberts-Smith if his client told him other soldiers were using his personal upset at the awards process to attack the decorated soldier.
"I don't recall it, but that's how I felt. I believe I've been manipulated," Person Four said, adding the two "mended some bridges" during the "'very emotional" conversation.
Mr Roberts-Smith, 43, is suing The Age, The Sydney Morning Herald and The Canberra Times for defamation over reports that he committed war crimes and murders in Afghanistan between 2006 and 2012.
One of a handful of Australian recipients of the VC since 1970, he has suggested some claims stem from jealous associates spiteful of his medallic achievements.
Under cross-examination on Thursday, Person Four agreed that Person Six hated Mr Roberts-Smith with a passion, and wanted to "bring him down".
He suspected another soldier had divulged to journalists a private conversation about an alleged war crime, this act had "absolutely" upset him, he said.
Person Four alleged he watched Mr Roberts-Smith kick a handcuffed Afghan prisoner off a cliff in the village of Darwan, Uruzgan province in September 2012.
It makes up one of the key alleged murders the media outlets who seek to rely on a defence of truth allege Mr Roberts-Smith perpetrated.
Person Four earlier testified that Mr Roberts-Smith covered up the execution, and his troop were directed to tell a false secret, but he later heard the former SAS corporal repeat the story.
"I kicked the c*** off the cliff," Person Four alleges he said.
Mr Moses questioned why someone of his client's stature would publicly boast about it.
"(Mr) Moses you seem to forget he was a VC winner at this time, he was running by his own narrative," Person Four said.
"The only one running by his own narrative is you," Mr Moses said.
"Absolutely not ... there are questions being posed to me here that I've never heard before."
"That's because your evidence is being tested isn't it."
"Test it all you want."
Person Four said after Mr Roberts-Smith and another soldier left their squadron, the situation intensified.
"The sharks were circling, put it that way," he said.
Person Four - who was medically discharged from the army last year - said while he believed Mr Roberts-Smith deserved the highest honour, the government and defence needed a "good news story".
The trial continues.
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