High-flying Israeli technology firm Geo Interactive Media yesterday unnerved its legions of private investors by announcing that its chief executive, Shai Schiller, had quit.

The Tel Aviv-based firm strongly denied reports that Mr Schiller had been forced out as part of a shake-up of senior managers or that it was shifting strategy to concentrate on wireless technologies.

"Schiller was not pushed out, he did a very huge job for us and is retiring," said the chairman, Naftali Shani. "This was not a sudden decision to leave, he told us a long time ago. He will continue to support and advise Geo as a non-executive director."

Shares in Geo were suspended at the company's request late yesterday morning after rumours of Mr Schiller's resignation spread and the price fell by 8% to £13.40.

A statement was issued shortly before 3pm confirming his retirement and replacement by co-founder Eli Reifman. Unusually, it included ringing endorsements from Geo's senior non-executive director, Mike Grabiner - the chief executive of Energis - and a senior banker from adviser Lehman Brothers.

"We wanted to demonstrate that the board unanimously supports Eli's appointment," Mr Shani said.

Shares in Geo were relisted in the afternoon and fell further to close down 16% at £12.15.

Mr Schiller had been chief executive for two years, during which time Geo grew into an international business worth £1.9bn. He retains 1.9m shares in the company, worth £23m, but cannot sell any for another 14 months.

"The past two years have been a tremendously demanding and exhilarating time," Mr Schiller said. "Inevitably the personal demands on me have been very great. I feel that now is the right time to take a break. For the benefit of any doubters out there, I have no intention of setting up a rival software company or to be employed in one."

Mr Reifman is well known to Geo shareholders, having previously co-ordinated investor relations and much of the day-to-day running of the business.

Mr Shani insisted that Geo would maintain its level of investment in broadcasting and messaging.