Kawasaki Heavy maintains forecasts despite submarine scandal

TOKYO -- Kawasaki Heavy Industries on Tuesday maintained its bullish earnings forecast for the year to March, even as it grapples with a slush fund scandal tied to its submarine contracts for the Japan Self-Defense Forces.

Local media reported last month that Kawasaki Heavy had for years been recording fictitious transactions with subcontractors to disguise spending on treating submarine crews in the Maritime Self-Defense Force (MSDF) to goods and meals. The alleged corruption is centered around the company's shipyard in Kobe, where submarines are built and repaired for the MSDF.