Malhotra was summoned by the Buner district police for interrogation where he was grilled for three hours and later set free, police sources in Swat district said.
52-year-old Singh was the Special Assistant to Chief Minister Khyber Pakhtunkhwa (KP) on Minority Affairs.
Police had arrested Baldev Kumar, a Swat district councillor and minority leader of Imran Khan-led Pakistan Tehreek-e-Insaf, for his alleged role in the murder of Singh, also of the same party.
Talking to reporters after the interrogation, Malhotra said Kumar made a false statement against him in order to implicate him in the case for settling political score.
"I have no association whatsoever with him (Kumar) for the last 20 years," he said.
"Truth always prevails and I have emerged successful because of the truth," he said after coming out of the police station.
Meanwhile, Khyber-Pakhtunkhwa Chief Minister told the Provincial Assembly that his government would move the court on Monday to stop the possible issuance of notification of Kumar as a Member of the Provincial Assembly on minority seat by the Election Commission of Pakistan.
Deputy Director of the KP Election Commission Khushal Zada had said Kumar would be an MPA on the reserved seat unless a court convicts him of Singh's murder.
"When the provincial government announces the vacant seat for minorities, Kumar will fill it as his name is second on the priority list."
The KP assembly passed a unanimous resolution paying rich tributes to their former colleague.
The resolution described Singh as an asset of the nation and said the government would bear the expenses of his family.
