Kawasaki Heavy Found to Have Pooled 1.7 B. Yen in Slush Funds

Tokyo, Dec. 27 (Jiji Press)--Kawasaki Heavy Industries Ltd. created 1.7 billion yen in slush funds over the six years through fiscal 2023 through fictitious transactions involving repair contracts for Japanese Maritime Self-Defense Force submarines, the Defense Ministry said Friday.

Some of the funds were used by the Japanese defense contractor to wine and dine MSDF personnel, the ministry said.

Kawasaki Heavy said that seven executives, including President and CEO Yasuhiko Hashimoto, will return some of their monthly pay, and that the executive in charge of shipbuilding, managing executive officer Keigo Imamura, will step down at the end of next March.

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 for such practices, starting in 2000.

In response to the scandal, the company said it will separate the division in charge of ordering goods and that in charge of confirming deliveries.

[Copyright The Jiji Press, Ltd.]