CaliToday (30/7/2025): Japan's Ministry of Defense is preparing to discipline multiple members of the Japan Maritime Self-Defense Force (JMSDF), including its Chief of Staff, Admiral Ryo Sakai, over an illegal payment scheme linked to submarine maintenance contracts.
The decision follows revelations that contractor Kawasaki Heavy Industries (KHI) created a slush fund through fraudulent transactions and used the money to illegally provide goods to submarine crew members.
According to interviews with officials cited by Japanese media on July 24, the Ministry is set to announce the results of its internal investigation on July 30, along with a final report from the Defense Inspector General's Office. The report is expected to confirm that some JMSDF personnel accepted personal items in violation of regulations. Admiral Sakai, the force's highest-ranking officer, is reportedly being held accountable for supervisory failures.
The misconduct was first uncovered during a tax investigation by the Osaka Regional Taxation Bureau. An interim report issued by the Ministry in December 2023 revealed that Kawasaki Heavy Industries had falsified orders for materials, such as packing supplies, to generate illegal funds. This money was then partly used to procure personal items for submarine crew members.
The Ministry noted that these fraudulent practices may have begun as long as 40 years ago, with the total amount involved in the last six years alone reaching approximately ¥1.7 billion (about $11 million USD).
Kawasaki Heavy Industries and Mitsubishi Heavy Industries are the JMSDF's primary submarine builders, both based in Kobe. In addition to production, these companies are responsible for the JMSDF's triennial submarine inspections and overhauls. The Ministry's investigation found that Kawasaki employees manipulated procurement records during this process to create the illicit financial reserves.
The submarine fleet, which comprises 25 vessels, is a critical pillar of Japan's naval defense strategy.
