Kawasaki Heavy Makes 200-M.-Yen Slush Funds Annually for MSDF


Tokyo, July 10 (Jiji Press)--Kawasaki Heavy Industries Ltd. created around 200 million yen in off-the-book funds every year to entertain Japanese Maritime Self-Defense Force members, the Defense Ministry said Wednesday.

According to the ministry, Kawasaki Heavy explained that the slush funds, totaling more than 1 billion yen, were generated through fictitious transactions with submarine repair material suppliers and that the company’s practice of letting the same division procure materials and do repair work resulted in the misconduct.

The ministry told the ruling Liberal Democratic Party the same day that submarine crew were provided with cash vouchers, food and drinks for years. Mitsubishi Heavy also purchased game machines and tools for them at their request.

Believing that part of the slush funds were used to entertain those MSDF members, the ministry has launched a special probe into the scandal.

Kawasaki Heavy and Mitsubishi Heavy Industries Ltd. have a duopoly over MSDF submarines, with the companies taking turns to receive orders to construct one submarine every year. Of the MSDF’s 25 submarines including practice vessels, 12 were made by Kawasaki Heavy. The firms repair vessels they made.

[Copyright The Jiji Press, Ltd.]

Jiji Press