Lutfi said that he was the one who encouraged the "Toxic" singer to ditch drugs that led her to infamously shave her head, reported Aceshowbiz.
"She told me that she had wanted to get clean but that she was struggling with it. Britney was involved in a wicked child custody battle. She told me someone told her they could scientifically test her hair for history of drug use, so she shaved it all off," Lutfi said in the courtroom.
"I told her it was very difficult to kick a drug habit. But I told her she needed to do it. I explained to her that society was not going to tolerate a mother with two kids abusing drugs," he added.
Lutfi remembered running into Spears in a nightclub in 2007. They became friends and close acquaintances after the singer confided in him about her drug problems and her doomed marriage to the father of her kids, Kevin Federline.
The manager denied allegations made by Spear's parents that he drugged and manipulated her. He admitted he took Adderall for attention deficit disorder but insisted he never shared his medication with his client, as Lynne Spears claimed in her memoir.
Lutfi also said he agreed to be Spear's manager only if she gave him permission to bring in drug-sniffing dogs to search her house.
"I just didn't want to manage anyone who did drugs," he insisted. In the house search, he allegedly found a bag containing crystal meth and flushed it down the toilet.
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Lutfi credited himself as the one who arranged a meeting between Spears and paparazzi so that they could get to know her as "a human being in order to sympathize with her."
He reportedly also urged her to rehire celebrity agent, Jason Trawick, after she fired him.
"She said she had fired him but was somewhat conflicted about using him again," Lutfi claimed.
Trawick is engaged to Spears now. He also serves as her manager and co-conservator of her personal affair along with her father, Jamie Spears.
Lutfi has sued Spears' parents Jamie and Lynne for defamation.