This can't be right! If this was proven he would have found himself amongst his 72 virigins by now- the IA in Kashmir don't let these things slide.
This happened in the early 90s, at the height of separatism and terrorism. He was undergoing training in Pakistani militant camps at the time, infiltrating into India occasionally, killing and murdering unarmed people and going back. Remember, there was no LoC fencing back then, neither was there a proper counter insurgency grid in the form of the Rashtriya Rifles. So terrorists could do such attacks with impunity, unlike today. How do you think they were able to threaten the entire Kashmiri Pandit community to leave their ancestral soil?
In 1995 he surrendered to Indian authorities, after secret meetings and backdoor deals. (Praveen Swami has reported that he even had a secret meeting with the PM.) Indian intelligence agencies were smart - they did not kill him, instead they used him to split up the various hardline separatist factions in Kashmir. He renounced the armed struggle, and sought to achieve "independence" through political means. Many other leaders of his group disagreed, and soon they splintered up.
End result is that the armed insurgency has been completely and utterly sidelined in Kashmir. The place is more peaceful than Karachi or Peshawar. And just like Kashmiris lost faith in armed insurgency, slowly they will also lose the desire for "independence" from India, because being with India is a lot more beneficial. India is doing well now, and poised to do a lot better in future. It is better to be part of this experience than to be a tiny landlocked state with no resources. The newer generation in Kashmir is realizing this.
So Yasin Malik's turnabout was a brilliant plan by our agencies. It yielded a lot more results than killing him would have done.