What would you do in this situation - relationship/college hassle?

I'm a business student and as part of my course we have to work in groups as a company. I recently got "promoted" within the company but this guy that I hate is saying that I only got promoted because earlier in the year I slept with our "manager" and now he's going to report us! but i got the position because i'm good at my course, not because i happened to sleep with this guy (my friend) ages ago!

what would you do?
 
let it play out, the truth needs no defense...this other guy is just jealous...or go to your instructor first and tell them you are being slandered.
 
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