Hannah Foster disappeared after a night out with a friend in March 2003
The man accused of the murder and rape of Hannah Foster was framed by his work colleague, a court has heard.
James Dennis hired a gang to abduct defendant Maninder Pal Singh Kohli, who owed him about £16,000, and coerced him into a sexual encounter, jurors heard.
But when Hannah was killed Mr Dennis had to make it look like the defendant was responsible, the court was told.
Hannah disappeared in Southampton on 14 March 2003 on a night out. Mr Kohli, 40, denies her murder.
Mr Kohli, who was extradited from India last year to stand trial, also denies her rape, kidnap and false imprisonment.
Winchester Crown Court was told Mr Dennis had lent the defendant about £16,000 to help pay his bills.
But the defence claimed this money was used to stop Mr Kohli making an affair with Mr Dennis's wife public.
Maninder Pal Singh Kohli denies all the charges against him
The jury heard Mr Dennis and his brother hired the men to abduct the defendant after he failed to pay the money back.
Abbas Lakha QC, defending, said Mr Dennis had to "neutralise Mr Kohli's threats" and it was planned to put him in a "sexually compromising position".
He claimed they wanted to "frighten the living daylights out of Mr Kohli".
Mr Dennis, who worked with Mr Kohli delivering sandwiches, said he was "disgusted" by the claims.
He denied playing any part in the events which led to the death of Hannah or that his wife was having an affair with Mr Kohli.
He said: "I feel disgusted that I am being accused of something like this."
Hannah, a 17-year-old A-level student, had been walking a short distance from a bus stop to her home in the Portswood area when she vanished in March 2003. Her body was found two days later in Allington Lane, West End.
The trial continues.