Controversial property developer Pearl Oriental believes the decision by the ruling council of the stock exchange to block its entry into the securities broking business was unfair and went against modern business principles. Chairman Wong Kwan says the company wrote a letter to the ruling council last week requesting an explanation for the rejection. Two weeks ago, the ruling council voted against its application to operate a securities brokerage, even after it had received the go-ahead from the stock exchange membership committee and the Securities and Futures Commission. Under the stock exchange's articles of association, the ruling council must give final approval for new membership into the stock exchange based on recommendation from the membership committee. It is not required to give an explanation for its decisions nor is there an appeals process. Mr Wong said the lack of transparency in the decision meant there was no way for Pearl Oriental to address any shortcomings and ensure a passing grade next time. 'We can re-apply for the brokerage licence in six months but it would be pointless to do so under present circumstances,' he said. The company was consulting lawyers on its options - but legal action was not the company's first choice of action. 'In the end, we have no wish to become a hero . . . we eventually want to be approved so we can start our new business,' Mr Wong said. Mr Wong said the articles of association which governed the stock exchange were drawn up during the tenure of Ronald Li Fook-shiu, the former stock exchange boss who was jailed in 1990. 'The stock exchange is not a private club, it's a public entity and should follow modern, legal, democratic and business processes. 'Even the supreme court has to explain its judgments.' Stock exchange executive director Lawrence Fok Kwong-man said the membership requirements had been in use for years and there had been no complaints. 'The applicants know about the exchange's rule. If they are not satisfied . . . they don't have to apply for membership,' he said. A ruling council member said: 'The exchange is a privately owned organisation, owned collectively by all the brokers in the exchange. Of course the council members, who are elected by all broker members, should be able to decide on who can and cannot join. 'The council is not a rubber stamp . . . we have many considerations and a high standard for new applicants.'