A demand by the US accountants of James Hardie Industries for an independent inquiry into allegations of illegal misconduct has resulted in the cancellation of a shareholder vote to approve the company’s accounts.

PricewaterhouseCoopers says that because the company is listed on the New York Stock Exchange and is governed by US law, its accounts cannot be approved without an independent legal review in light of the allegations.

The board has announced it will launch an independent investigation into allegations raised at the NSW special commission of inquiry that it deliberately engaged in fraud to evade its obligations to asbestos victims by shielding the company from future liabilities.

The inquiry has heard that a special $293 million trust set up in 2001 by James Hardie to take over future asbestos liabilities was short by at least $800 million, and that directors knew about it.

New company chairman Meredith Hellicar says independent legal advisers will conduct the investigation.

Meanwhile, the Victorian Government has rejected a James Hardie proposal for governments to set up statutory compensation funds for asbestos victims. Attorney-General Rob Hulls says James Hardie should not be able to abrogate its responsibilities to victims.

Mr Hulls is against the proposal because it is conditional on governments limiting claimants’ common law rights to sue asbestos manufacturers.

Queensland and NSW will not make a decision on a statutory fund until the NSW special commission of inquiry hands down its final report next week.