Japan’s Ministry of Defense said it has imposed a 2.5-month suspension on Kawasaki Heavy Industries after confirming long-term misconduct in inspections of diesel generators used on submarines.

According to a statement released on December 26, the Ministry of Defense of Japan will bar Kawasaki Heavy Industries from designated government contracts from December 26 through March 11, 2026. The decision follows an internal investigation that found irregularities in inspection procedures for diesel engines used to generate power on submarines.

The ministry said its review showed that many of the engines failed to meet fuel consumption rates specified in official requirements. At the same time, the ministry stated that the irregularities did not affect safety or performance.

The suspension marks one of the most serious administrative penalties imposed on a major Japanese defense contractor in recent years, underscoring heightened scrutiny of quality control and compliance within Japan’s defense supply chain.

In a statement issued the same day, Kawasaki Heavy Industries President Yasuhiko Hashimoto addressed the decision. “We take this very seriously. We will thoroughly work on measures to prevent recurrence and will make every effort to restore trust,” Hashimoto said. The company also released additional findings from its internal investigation along with steps it said it is taking to prevent similar issues in the future.

The case extends beyond engine inspections. The Ministry of Defense also announced disciplinary action against personnel of the Japan Maritime Self-Defense Force over a separate scandal involving submarine maintenance contracts.

According to the ministry, Kawasaki Heavy Industries had generated illicit funds through fictitious transactions with subcontractors related to submarine repair work. The ministry said the funds were then used by Kawasaki personnel to provide personal items to Self-Defense Force members, including gaming consoles, golf bags, and watches, none of which were required for official duties.

The ministry said 11 Self-Defense Force members were disciplined for receiving the items, valued at between ¥10,000 and ¥400,000 each, with a total value of approximately ¥1.16 million ($7,800). Three personnel received suspensions, while eight were given pay cuts.

Among those suspended were three supervisors involved in contract oversight with shipbuilding companies. One senior enlisted member at the Kure Ship Repair and Supply Facility received a 15-day suspension after the ministry said he accepted personal items while serving as a submarine crew member and continued the practice after becoming a supervisor. Two others, also in their 50s, received five-day suspensions.

The eight personnel who received pay cuts included current or former submarine crew members. Four were docked one-sixth of their monthly pay, three lost one-tenth, and one lost one-fifth of monthly pay before retiring following the disciplinary action.

A final report from a special defense inspection released in July initially identified 13 personnel who had received personal items. Subsequent investigation determined that some items were not directly linked to official duties, reducing the number of disciplined individuals to 11, the ministry said.

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• Блог Defence: New scandal hits Japanese submarine builder