By Alperen Aktas
ISTANBUL (AA) - During an ongoing defense audit, investigators discovered that Kawasaki Heavy Industries allegedly engaged in fraudulent transactions for nearly 40 years to generate illicit funds, which were then used to supply goods to members of the country's Maritime Self-Defense Force.
The scheme was uncovered during a tax audit by the Osaka Regional Taxation Bureau, Japanese daily The Mainichi reported on Monday.
Investigators found that Kawasaki Heavy Industries used fictitious procurement orders for submarine repairs to channel money through its business partners. Some of the funds were concealed using subcontractors to avoid detection.
A special investigation committee formed in June is probing into the company’s actions, with findings expected soon. The Ministry of Defense estimates that the scheme generated around 200 million yen (approximately $1.28 million) annually.
The misconduct reportedly stemmed from inadequate official supplies, with Kawasaki firm filling the gaps for MSDF personnel over time. As MSDF demands grew, the collusion deepened.
A defense audit is currently underway, with a focus on 1,500 MSDF members to determine the extent of the wrongdoing.
Kawasaki Heavy Industry has yet to comment on the ongoing investigation or media reports.