Goldman Sachs has suggested that the Hong Kong Stock Exchange may be making an error in limiting company founders to ownership of only 50% of dual class shares.

Reuters reports that Ken Hitchner, the investment bank’s chief executive in the Asia-Pacific, said the limit could affect the Hong Kong exchange’s ability to compete with New York.

Last month the Hong Kong exchange proposed allowing much-criticised dual class shares as part of changes to listing rules.

Hong Kong is seeking to introduce the changes as a means of making it more attractive for big Chinese tech firms to list in the territory.

A report from the exchange proposed weighted voting rights (WVR), including dual class shares.

The report said: “It is our intention to attract more good-quality, high-growth and innovative companies to list in Hong Kong.”

However, it proposed limiting ownership to 50% of dual class shares.

Reuters cites Hitchner as saying the limits did not “seem in line with what Hong Kong is trying to do here”.

In justifying WVR shares, the Hong Kong exchange paper says that high-tech companies “sometimes rely heavily upon the technical expertise, market knowledge and foresight of their owner managers”. It added that the influence of WVR shares “are often diluted to a low level after the company has raised funds several times from outside investors prior to listing”.

David Smith, head of corporate governance Asia-Pacific at Aberdeen Asset Management, told the South China Morning Post: “Hong Kong has achieved a lot of corporate governance reforms over the past two decades but the listing reform to allow dual-class shares structured companies [sic] to list here is a big step backward from the corporate governance point of view.”