The Associated Press
Lawyers for P. Uthayakumar, a leader of the Hindu Right Action Force, or Hindraf, filed the suit in the Kuala Lumpur High Court seeking damages totaling at least 100 million ringgit (US$28 million; €19 million) from the government, the national police chief and the attorney general.
Uthayakumar was suing the government because it "attempted to blacken his reputation globally" with the claims of terror links, said N. Surendran, a lawyer involved in the case.
"They have not produced a shred of evidence to prove their claim," Surendran said.
Senior government and police officials could not immediately be reached for comment.
The suit stemmed from what Uthayakumar — who is currently jailed without trial for allegedly threatening national security — called "a campaign of vilification and demonization" launched by authorities, according to the lawsuit documents.
Government and police officials had said last month that Hindraf was being investigated for possible ties to terrorism, including the Liberation Tigers of Tamil Eelam of Sri Lanka. The LTTE has been branded a terror group by the United States and European Union.
The accusations came amid a crackdown on Hindraf after it organized a rally of about 30,000 ethnic Indians on Nov. 25 to protest the community's economic plight and alleged racial discrimination by the Malay majority government.
The protest was crushed by police with tear gas and water cannons.
Uthayakumar and four other Hindraf leaders were subsequently detained under security laws that allow indefinite detention without trial.
Hindraf has tried to highlight what it claims is racial discrimination faced by ethnic Indians, who form 8 percent of Malaysia's 27 million people. Malays, who are Muslims, make up about 60 percent of the population, and ethnic Chinese account for a quarter.
Many Indians say the Malay-dominated government does not give them a fair chance to get jobs and education. They also complain their temples are being systematically destroyed. The government has repeatedly rejected claims of any discrimination.
