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Japan Takes Delivery of Kawasaki Heavy’s Fourth Taigei-Class Submarine

The vessel cost 70.2 billion yen as the company faces probe into defense contract fraud
Japan
k 7012.TSE Mid and Small Cap 2000
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Kawasaki Heavy Industries delivered its fourth advanced Taigei-class submarine to Japan’s Defense Ministry on Thursday, continuing production despite an ongoing investigation into fraudulent billing practices.

The submarine, named Raigei, was built at a cost of 70.2 billion yen ($470 million) at the company’s Kobe Works facility. The 84-meter vessel has a displacement of approximately 3,000 tonnes and will be stationed at the Japan Maritime Self-Defense Force’s Kure district headquarters near Hiroshima.

Notable features include accommodations for female crew members among its 70-person capacity and an innovative diesel engine system that generates electricity for high-performance lithium-ion batteries, enabling extended underwater operations.

The delivery comes as Kawasaki Heavy faces scrutiny over a scheme where it allegedly engaged in fictitious transactions with subcontractors to overcharge the Defense Ministry. The illicit funds were reportedly used to purchase goods and cash vouchers for submarine crew members.

In December, the company released an interim investigative report and announced plans for disciplinary actions, including compensation reductions for management. A Kawasaki Heavy spokesperson addressed the matter before Thursday’s handover ceremony, stating that the investigation remains in progress with results to be announced upon completion.

The Raigei represents the 31st submarine built by Kawasaki Heavy in the postwar period.

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