Kawasaki Heavy Industries created ¥1.7 billion ($10.8 million) in slush funds over six years through fiscal 2023 through fictitious transactions involving repair contracts for Maritime Self-Defense Force submarines, the Defense Ministry said Friday.
Some of the funds were used by the defense contractor to wine and dine MSDF personnel, the ministry said.
The bogus transactions, which started no later than around 1985, involved padding orders for products such as disposable rubber sheets used in submarine repairs, the ministry said.
Kawasaki Heavy was joined by three subcontractors on such practices, starting in 2000.
In addition to wining and dining MSDF members, the funds were also used to finance their personal purchases of goods such as game consoles and fishing gear.
MSDF members were also provided with equipment used in submarine-related missions. They were asked what they wanted. Many requested cold weather gear and safety shoes from outdoor brands.
The pooled funds were also used for personal purchases by Kawasaki Heavy employees and as expenses for expressing gratitude for submarine repair workers and as margins paid to subcontractors. It has not been able to pinpoint how much money was used for the MSDF, the ministry said.
The ministry also investigated 100 other defense contractors. Although no bogus transactions were found, there were discrepancies in a submarine repair contract with Mitsubishi Heavy Industries.