H share Dongfang Electrical Machinery has withdrawn its writ against the China Construction Bank claiming 156 million yuan (about HK$145.18 million) in entrusted funds. The change of heart came as the H share was finally able to retrieve the funds it claimed it had entrusted with the Luohuang department of the bank's Chongqing sub-branch, to be lent to a third party. The third party, which then defaulted on payment, is understood to be a mainland company. Dongfang yesterday said the decision to withdraw proceedings in the Chongqing City Higher People's Court followed execution of settlement and repayment agreements with the bank and third party on June 12. Dongfang said it had been repaid 61 million yuan on June 12 and would be repaid a further 30 million yuan within 15 days from the date of the agreement. The remaining 65 million yuan would be paid by December 31. As part of the condition, the third party would have to pledge certain legal and effective assets recognised as security for repayment of the amounts. Interest accrued on the funds would be calculated at the prevailing bank interest rate. The Chongqing sub-branch of the China Construction Bank would monitor the third party's performance in meeting repayment obligations, the company said. Dongfang began civil proceedings against the bank's Chongqing sub-branch on April 14 after it had been unable to retrieve the funds lent to the third party. The bank said the agreement had been signed by an official who was not authorised to do so. Dongfang said it had applied to the stock exchanges in Shanghai and Hong Kong for suspension of trading in the company's A shares and H shares yesterday. Application had been made to resume trading in the respective shares today.