Embattled accounting firm Andersen last night pleaded not guilty to federal charges that it obstructed justice by shredding vital documents connected to its audit of collapsed energy trader Enron.

Eugene Frauenheim, managing partner of Andersen's Houston office, entered the plea on behalf of the Chicago-based accounting firm before Judge Calvin Botley in Houston.

Andersen, the world's fifth largest accounting house, faces fines of up to $500,000 and up to five years of probation if convicted on the charge, filed on March 14. The judge said jury selection in the case would begin on May 20.

Outside the courthouse yesterday, several hundred Andersen employees protested against the US government's criminal proceedings.