Kawasaki Heavy's False Deals in MSDF Scandal Continued for Years

Tokyo, July 5 (Jiji Press)--Kawasaki Heavy Industries Ltd. may have continued for years fraudulent transactions aimed to pool funds to wine and dine Japanese Maritime Self-Defense Force members, as well as provide them with money and gifts, it was learned Friday.

According to the Defense Ministry and Kawasaki Heavy, the repair department of the firm's Kobe Shipyard in Hyogo Prefecture, western Japan, is believed to have created off-the-book funds through fictitious deals related to the work to repair MSDF submarines, such as fictitious orders for materials to subcontractors, and used the money to pay for meals for MSDF submarine crew members, as well as provide such people with gift certificates and daily items.

The allegations first came up during a tax investigation by the Osaka Regional Taxation Bureau. Kawasaki Heavy was slapped with additional tax of around 600 million yen for the six-year period until fiscal 2022. Informed sources said that the practice of false deals may have started a while before then.

On Friday, Defense Minister Minoru Kihara announced that a special defense inspection will be launched on the matter.

"If the allegations are true, (the scandal) is a serious issue that needs to be dealt with strictly," he said.

[Copyright The Jiji Press, Ltd.]

Jiji Press