G Gnanaraja said he met Lim for the first time on Aug 20, 2017, inside a car driven by another businessman, Zarul Ahmad Zulkifli, another key prosecution witness in the trial.

Gnanaraja insisted that a bag with RM1 million was handed to Lim under Zarul’s instruction.

He said that after the bag was given to Lim, Zarul dropped the DAP leader off at Publika.

Lim’s lawyer, Ramkarpal Singh, disputed Gnanaraja’s testimony, saying it defied logic and was “highly impossible” that Lim would carry a bag filled with cash in broad daylight.

“You said he wore a state government uniform when you saw him, and then (Lim) headed to a crowded shopping mall,” Ramkarkal said.

Gnanaraja replied: “Some things did not make sense but it did happen.”

The businessman also said he did not know where Lim went after he was dropped off at Publika.

He also told the court Zarul had sent him a letter of demand in 2018, asking him to return a sum of RM19 million.

“I don’t agree with the contents of the letter, in which (Zarul) said I cheated him. My lawyers asked him to show proof,” he said, insisting that the RM19 million was a “friendly loan” from Zarul to him.

Lim is accused of using his position as then Penang chief minister to solicit a 10% share of profits from the undersea tunnel project and receiving RM3.3 million in bribes from Zarul.

He also faces two charges of dishonestly misappropriating RM208.7 million worth of state land.

The hearing before judge Azura Alwi continues on March 3.