TOKYO (Kyodo) -- Japan's Defense Ministry said Friday that its major contractor Kawasaki Heavy Industries Ltd. began fictitious transactions with its subcontractors at least 40 years ago, with such fraudulent practices in six years through March worth about 1.7 billion yen ($11 million).

Of those, around 600 million yen was pooled as slush funds by Kawasaki Heavy, which regularly receives submarine maintenance and repair orders from the Maritime Self-Defense Force, according to the ministry's interim report on its investigation into the scandal.

The slush funds were used to buy goods such as home appliances and handheld gaming consoles for MSDF members based on their requests, the report said.

The ministry issued a severe reprimand to Kawasaki Heavy and will demand it repay the amount overcharged, while continuing to investigate MSDF members involved on suspicion of violating the ethics law.

"It seriously undermines public trust, so I deeply apologize," Defense Minister Gen Nakatani said in a statement following the release of the report.

Kawasaki Heavy President Yasuhiko Hashimoto held a press conference in Tokyo, extending his "heartfelt apology." He will return 30 percent of his monthly remuneration for five months.

The revelations of the scandal in July came on the heels of a spate of misconduct cases, including mishandling of classified information, power harassment cases and fraudulent receipt of duty allowances, which resulted in disciplinary actions against 218 SDF members and Defense Ministry bureaucrats.

The ministry also continues its investigation into Mitsubishi Heavy Industries Ltd., another MSDF submarine manufacturer, after finding the company purchased items not specified in contracts and failed to conduct some of the contracted services.