UPDATE 1-GNE scraps special dividend, to be investment firm

* Plans limited share buyback

* Microgen's Ratcliffe to become chairman

* Shares fall 20 pct (Adds details)

Dec 15 (Reuters) - Petrol station operator GNE Group Plc GBNE.L said on Monday it would not pay a previously announced special dividend as it planned to convert itself into an investment company in the technology sector, sending its shares down 20 percent.

GNE had said after it sold its main operating subsidiary, Petrol Express Ltd., in October, that it would pay a special dividend of 150 pence per share.

But the company said on Monday it had been approached by a new investor group with a proposal to convert GNE into an investment company.

GNE said it intended soon to exercise its existing authority approved at its annual general meeting in June to begin a limited share buy-back programme. It also planned to renew and increase the buy-back authorisation.

The company named Martyn Ratcliffe, chairman of software company Microgen Plc (MCGN.L), as a director.Ratcliffe holds 2.1 million shares or 15 percent of GNE's issued share capital. If shareholders approve the new investing strategy proposed by the board, Ratcliffe will be appointed executive chairman of GNE, the company said.

At 0925 GMT, shares of GNE were down 37.5 pence at 150 pence on the London Stock Exchange. (Reporting by Tresa Sherin Morera in Bangalore; Editing by Mike Miller)