REFILE-UPDATE 1-CDC to run Yulgang in China till dispute ends

(Corrects typographical error in headline)

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Oct 26 (Reuters) - CDC Games, a CDC Corp (CHINA.O) unit, said Chinese regulators have indicated that the license to operate online game Yulgang in the country remains with it until resolution of a dispute with Korea's Mgame.

New products of Mgame, which developed Yulgang, will not be allowed to enter Chinese market until resolution, the company added.

CDC Games filed a suit in Hong Kong against Mgame on Oct. 17, after the Korean game developer terminated its contract with CDC citing breach of contract for non-payment.

The lawsuit alleged that Mgame had not been providing adequate technical support for Yulgang, leading to the game's increased exposure to piracy.

CDC Games had also filed a lawsuit in Korea against Mgame for breach of contract with similar allegations.

Shares of CDC Corp were trading flat at $7.11 in morning trade on the Nasdaq. (Reporting by Ratul Ray Chaudhuri in Bangalore)