The board subsequently announced a pre-tax loss of L440.2 billion (#186.7 million) after a L200 billion provision against expected losses on selling part of the group's struggling computer business. The group made an operating loss of L80.8 billion.
There had been speculation that Francesco Caio, chief executive of Omnitel, the mobile telephone company in which Olivetti has a 41 per cent stake, had clashed with De Benedetti on how frank the group should be in explaining its position to the market.
Caio was appointed group managing director following the departure of Corrado Passera at the end of June. De Benedetti, who has run the group since 1978, will be replaced by Antonio Desone. On Wednesday, shares in Olivetti surged more than 11 per cent on Wednesday after the news that De Benedetti had quit as chairman.
The company's shares had fallen around nine percent, close to all-time lows, on Monday and Tuesday as rumours swept the stock market about conflict between top managers and on concern about the group's financial health.
But they opened higher on Wednesday and were automatically suspended when a further jump took the price above a 10 per cent trading ceiling.
De Benedetti, in a statement, said he was resigning as chairman and board member in line with a declaration he made linked to the successful outcome of a huge 2.26 trillion lire capital increase concluded in early 1996.
I declared that if the company had not reached positive economic results in the course of 1996, I would respond with what I considered to be the appropriate steps, he said.
De Benedetti first came to international prominence in 1978 when he took over the management of Olivetti, then a moribund, loss-making typewriter maker, after his family's finance company, CIR, acquired a 15 per cent stake.
It seemed a doomed enterprise but the industrialist transformed the company into Europe's biggest supplier of office automation equipment and one of the largest makers of personal computers after International Business Machines Corp.
De Benedetti leaves Olivetti a far bigger company than the one he rescued but one still mired in debt. The board named board member Antonio Tesone as the new chairman at a meeting held in Milan late on Tuesday.
Francesco Caio remains managing director after his appointment in July and the board also proposed creating an executive committee of Tesone, Caio and two other board members. Institutional shareholders representing about 25 per cent of Olivetti's stock met in London last week.
