It had been suggested that an upgrade of the EPS system may have been the cause but as this has been rejected, Octopus has commissioned accounting and consulting firm PricewaterhouseCoopers to start an independent investigation.

A report is expected in about four months.

Octopus cardholders using EPS add-value services at MTR and KCR stations had more than HK$140,000 deducted from their bank accounts in 571 transactions between last December 5 and February 3 this year despite incomplete transactions that did not log purchased values on the cards.

ADVERTISEMENT

Speaking at a Legislative Council financial affairs panel meeting Friday, Octopus Holdings chief executive Prudence Chan Bik-wah said the company had not been able to find the cause.

EPS Company (Hong Kong) general manager Raymond So Wai-piu stressed the incidents were not related to the EPS network upgrade between 2am and 5am on December 4, saying the company merely changed the network equipment.

Chan said Octopus held final responsibility for the incidents and apologized to the affected customers. She said PricewaterhouseCoopers will suggest solutions to prevent more incidents from happening.

Chan said customers could still top up their Octopus cards by paying cash since this service was functioning normally. Add-value transactions through EPS represent only 1.5 percent of the company's total add-value service.

Legislator James To Kun-sun inquired if the 571 customers who were short-changed represented the tip of the iceberg since the company had only rechecked transactions occurring between last December and January.

He urged the company to check its accounts thoroughly and not just wait for the results of the new investigation.

Lawmaker Mandy Tam Heung-man, who represents the accountancy sector, doubted the way the company's accounts were kept.

"The incident reflects some flaws in the internal control of Octopus Holdings. How were the accountants able to balance their books with these errors?" she asked.

Another legislator, Ronny Tong Ka-wah, said the incidents cast doubts about Octopus's operation since some people may fail to notice their accounts have been debited without their cards being credited.

He suggested the system be changed to allow cards to be credited first before money was deducted from bank accounts.

Andrew Leung Kwan-yuen, who represents the industrial sector, urged the company to register the names of all cardholders so that customers could be tracked down should the need arise.

Andrew Cheng Kar-foo urged Octopus to improve its software and its system to prevent such incidents from happening again.

"I hope Octopus can also add value to its own services, otherwise it may fade out," Cheng said.

Legislators Emily Lau Wai-hing and Abraham Shek Lai-him said Octopus should not have the monopoly and proposed allowing other companies to offer the service. But Chan replied Octopus did not receive any advantage from the government.

Octopus currently has more than 14 million cards in circulation. It handles more than 10 million transactions a day, with an average daily transaction value of HK$77 million, amounting to HK$29 billion a year.

Chan said the identities of 90 percent of the cardholders are not known.

Octopus is jointly owned by five public transport operators, including the MTR Corp which has more than half the shares (57.4 percent).

The other shareholders are the Kowloon- Canton Railway Corp, Kowloon Motor Bus, Citybus and First Bus.