Shafilea Ahmed's sister told a jury on Thursday she lied to police investigating the teenager's disappearance because she was "covering up for her parents".
Alesha Ahmed was continuing her evidence at Chester Crown Court where parents, Iftikhar, 52, and Farzana, 49, deny murdering 17-year-old Shafilea.
The teenager vanished in September 2003 and her decomposed remains were discovered in Cumbria in February 2004.
It was not until last year that Ms Ahmed provided the "final piece of the puzzle" about Shafilea's death, the prosecution say, when she disclosed that she witnessed her parents killing Shafilea at the family home in Liverpool Road, Warrington.
On Thursday, the jury were read passages of Ms Ahmed's first police interview following Shafilea's disappearance.
The witness, who was aged 15 at the time, told officers that she woke up at 7am that morning and saw that Shafilea was gone and that her bag was also missing.
She went on in the interviews to say she did not think her parents had caused any harm to her sister.
Cross-examined about the interview, Tom Bayliss QC, defending Mr Ahmed, said: "You were telling the truth, weren't you?"
Questioned about why Ms Ahmed suggested to police that Shafilea may have been with a male friend, the barrister said: "The wicked and cruellest thing you could do in those circumstances, knowing someone is dead, is to lay suspicion on a wholly innocent individual."
Ms Ahmed responded: "I didn't put suspicion on someone else and I think it is wicked and cruel you are saying it yourself."
Mr and Mrs Ahmed allegedly murdered their "Westernised" daughter because they believed her conduct was bringing shame on the family, the prosecution say.
Ms Ahmed made the claim about Shafilea's murder when she was in custody after being arrested for organising a robbery at the Ahmed home in August 2010.
The court heard how in the days leading up to the robbery in August 2010 Ms Ahmed - a full time student - was "flush" with money and that £6,500 was paid into one of her bank accounts, on top of cash including student loans being paid into another account.
The jury was told how she paid £1,500 for a Dolce and Gabbana bag as well as "renting" a grey BMW for £400 a week.
She claimed she had saved the money up through a job working at a petrol station, getting paid for doing girls' hair extensions, and from saving on rent when she moved in with her boyfriend.
Questioned further about the lead up to the robbery, Ms Ahmed refused to go into detail about the motive and the others involved.
Last week, Alesha described how her parents pushed Shafilea onto the settee in their house and she heard her mother say "Just finish it here" as they forced a plastic bag into the teenager's mouth and suffocated her in front of their other children.
The jury was sent home and the trial will resume at 10am tomorrow.
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