TOKYO, Dec. 26 (Xinhua) -- Japanese major defense contractor Kawasaki Heavy Industries Ltd. reportedly generated about 1.7 billion yen (11 million U.S. dollars) in slush funds over six years through bogus transactions with subcontractors, using part of the money to buy personal items or meals for Japan's Maritime Self-Defense Force (MSDF) members.

The Ministry of Defense will demand that Kawasaki Heavy, which handles maintenance and repairs of MSDF submarines, repay the amount overcharged since fiscal 2018, Kyodo News reported on Thursday, citing sources close to the matter.

The ministry found that the company's repair work included procurement that never took place and will soon release an interim report on its investigation into the scandal, according to the sources.

Through such fictitious transactions disguised as legitimate procurement orders, the Kobe-based Kawasaki Heavy pooled illicit funds used to buy goods requested by submarine crew members or pay for their meals, the report said.

The MSDF's submarines are manufactured by Kawasaki Heavy and Mitsubishi Heavy Industries Ltd., with both companies providing regular maintenance and repair services.

Following the Kawasaki Heavy scandal, the ministry has also investigated Mitsubishi Heavy and discovered that the company purchased items not specified in contracts and failed to conduct some of the contracted services, the report said. Enditem

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