An animation film company has filed a lawsuit against Malaysia's Multimedia Development Corporation (MDC) over the country's multi-million-dollar Entertainment Village project, a report said today.

Astrio filed the suit claiming RM8.7 million (US$2.3 million) in damages, the official Bernama news agency said, following its involvement in E-Village launched by former premier Dr Mahathir Mohamad in 2002.

The suit named MDC chief executive Mohamed Arif Nun, vice-president Kamil Othman, the country's finance and international trade ministers and the Malaysian government as defendants, the report said.

Astrio, which produces 3-D animation films, alleged the defendants had failed to honour guarantees to provide a "one-stop filming centre" capable of competing with the entertainment capitals of the world.

This included a failure to meet expectations on intellectual property protection and provide competitive financial incentives to Astrio.

Cashflow problems

MDC officials were not immediately available for comment.

E-Village, modelled after Universal Studios in the United States, was slated to have been completed by 2007 at a cost of some RM3.0 billion and was intended to make Malaysia the hub of the booming Asian film industry.

It was to include eight studios, an academy of dramatic arts, theme parks, a hotel, residential areas and health farms but the project was halted after the developer ran into cashflow problems.

E-Village was also integral to development of Malaysia's Multimedia Super Corridor - a hi-tech zone designed to leapfrog Malaysia into the information and knowledge age.