How could such a person extort money from new intake.... Geez! That was a wrong act and selfish of him. That was so hurting and this is what happened with false allegations, no one will listen to your plea until they have vented their anger and calmed down but things had already been damaged. Your manager could have let others know you did nothing wrong instead of apologizing at the gate. Well, you got the job back and got an apology too.
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Well that's people for you, all in the name of help, and after the incident I don't take recommendation from anyone again, I'll rather let management do their thing.
Yea don't mind the manager, their proudness can't make them admit wrong in public.