Mr Justice Brian Keith said the stock exchange's ballot system 'calls to mind the Victorian era and gentlemen's clubs'. The decision for corporate membership rests in the hands of the 31-member stock exchange council. Voting is by secret ballot. At least seven members of the council must vote and three must open the ballot box. Members cast either a white or black ball, or abstain. If four or more black balls are cast, the candidate is not admitted. Pearl Securities received 22 votes in favour, four black balls and one abstention. Its application was therefore refused. The judge said the system rendered it impossible to give advance notice of any concerns members might have. It was also impossible to know which members voted against the candidate, 'thereby denying the decision the transparency which accountability brings'. Moreover, it prevented an applicant 'from knowing whether membership has been denied on valid grounds, on unjustified grounds, or on arbitrary or capricious ones'. When considering a candidate, information provided was relatively brief, the judge said. It included a brief outline of directors and shareholders, the amount of the company's share capital, details of the company's holding company and the identity of the A share to be transferred to the company. Pending decisions are made public by posting a general notice at the exchange at least seven days before the council meeting.
