first of all I am not quite understand the whole picture of the case. Anyway, to cut short time, I will go straight to the main issue, namely whether a police report you made will make you open for a defamation suit?
our law in Malaysia and case precedents outline that a police report per se is not an out right privilege document that would not subject to defamation suit.
in other words, a police report is a qualified privilege document, so if the report is found out to untrue or false, the reporter may subject to defamation suit.
so, to be safe, I would normally advice my client not to mention directly the person's name inside the report, but rather safe it when you are called for further investigation (or first information report) by the investigation officer (IO).
anyway, what is done is done. you should not simply withdraw the report due to his threat of suing you back for defamation.
remember, legally there is no 'term' as 'tarik balik report', this is because when you report a criminal offence to a police, the crime is actually done against the government, so the government will take action to protect the society (not only victim, I.e. you).
even if you have withdrawn you report, the police still can proceed against the offender, theoretically. Yes however, technically it would be most not likely as the victim would no longer cooperate as witness.
second, when you simply withdraw a report, it means that your report may be made in bad intention or false report. Making a false would subject to criminal penalty under penal code. and to make things worse, by withdrawing the report it will further strengthen 'his' case against you under defamation saying that 'the report earlier made was truly baseless and that's why you are now withdrawing, but since the act has been done, I still suffer from the false report.'.. doesn't this make sense?
so think carefully, and good luck.
p/s I will post this email in my blog for other to share.
Sent: Sunday, April 05, 2009 5:14 PM
Subject: Dulu ugutan sekarang Ugutan Undang2
Dear Mr Kamarul Irzuan,
I want to tell u about my case.
1. I did a police report about someone blackmailing me for money and entertainment (paying him some hookers) for the reason that I made him a Party member by accident. He just wanted to be a member of Youth NGO. This is my secretary's fault.I am a Youth Chief. I said to him lets settle your membership first. And the other too I cant guarantee anything. He push and push me to say yes.note : Now he is not a member of my Party anymore.
2. But he uses the word promise. He makes me to promise. I dont want to promise him anything but then I just cant stand it anymore. So I just said yes (mengiakan). He is a bully since my childhood. I was too scared of him. I cant stand it when I am against him.
3. Now he has made another police report stating that it is a 'fitnah'.
4. Now I am the victim because I dont have anyproof aginst him. Because the incident happen at a parking lot. There was no witness. Accept a comment by him in a blog statting that he wanted to beat me up but he wouldnt because he is scared of the police.
5. Will I be a victim and be charge for making fitnah? Can he make a Defamation Suit againts me? (Saman Malu)
6. He has not given his statement to the police yet.
7. What should I do? Should I 'tarikbalik' the report? Oh help me...