Andersen Candidate Rejected

Partners of Andersen Worldwide, the world's largest professional services organisation, have begun an open dispute over the choice of a successor to the current chief executive by rejecting the candidate put forward by the board.

Jim Wadia, head of Andersen's UK accountancy arm, won a majority of votes cast by the firm's 2,700 partners in 80 countries. But he failed to secure the required two-thirds majority.

The board will announce on Monday that it is now putting forward George Shaheen, managing partner of Andersen's global consultancy business. Last month it rejected Shaheen in favour of Wadia, despite indications that the former was preferred by many partners.

''George Shaheen has demonstrated exceptional leadership as the head of Andersen Consulting,'' said a board spokesman in New York.

The rejection of Wadia's candidacy undermines the board's efforts to resolve tensions between the organisation's two separate business units. These are Arthur Andersen, the accountancy firm founded in 1913, and Andersen Consulting which became a separate firm in 1989.

Wadia, who would have been the organisation's first chief executive from outside the US, was closely identified with an internal report which urged partners to preserve a single organisation under the Andersen umbrella.

This strategy was overwhelmingly endorsed at a partners' meeting in Paris last month.

But the rapid growth of the consultancy wing has led to ''turf wars'' between the two businesses.

While accountancy revenues are growing at about 12 per cent a year, consultancy is producing an annual growth rate of 22 per cent.

Andersen Consulting has also begun to outstrip its more traditional sister firm in terms of absolute revenue.

The board, which has an inbuilt majority from the accountancy side, selected Wadia from a shortlist of two prepared by a nominating commission.

The other was Shaheen, who is understood to have won more support than Wadia during informal ballots in Paris.

He would be likely to institute reforms such as changing the rules for ''income support'' which channel profits from the consulting business to the accountancy side.

Shaheen would be the first chief executive from the consulting side.

If successful, he would replace Larry Weinbach for a four-year term after he steps down in September, having been in office since 1989.

The results of the ballot will be announced later this month.