Paraguay’s impeached president charged over bank collapse

Paraguayan prosecutors charged ex-president Santiago Pena and took him into custody Saturday over a banking crisis that saw millions of people cut off from their money, sparking major protests.

Pena, Paraguay's youngest-ever president at 47, was removed from office by the Senate on Friday, just three days after the collapse of a leading bank with which he had business links.

He had offered to resign but lawmakers impeached him instead, stripping him of the immunity he would have enjoyed had he stepped down.

In a fast-moving sequence of events, Pena was brought before prosecutors on Saturday and charged with "breach of trust and mismanagement for personal gain."

Ueno Bank was a popular online bank that held accounts for nearly half of Paraguay's 6.5 million people, plus more than $800 million in government funds.

Its collapse rocked this small, normally stable country, leading to street protests.

Pena, who came to power in 2023, owned shares in the bank's holding company, Ueno Holding, until he sold them last year.

He is accused of using his influence as president to steer millions in government deposits to Ueno Bank and of hiding or downplaying its financial woes, even though he was warned about questionable loans and solvency issues.

Pena is also accused of a conflict of interest for naming former Ueno Bank director Carlos Carvallo to run Paraguay's Central Bank.

Pena's lawyer Ricardo Preda denied the charges against his client and said that in Paraguay, it is not the president but rather a minister who decides where government money is deposited.

After a hearing with Pena on Saturday, Judge Hernan Otazu told reporters he had ordered the former president taken into pre-trial custody and held at the same Asuncion facility where he was taken after his removal from office on Friday.

The judge froze the assets of Pena and Carvallo, who faces the same charges as the former president, plus one of falsifying government documents.

Pena declined to make a statement during the hearing, Otazu said.

The Central Bank said it has started paying out money to Ueno Bank customers caught up in the collapse and that more than 50 percent have recovered their funds.

Giovanni Catolinom, 40, was not one of them. He trembled as he told AFP that funds from his new travel agency -- around $16,000 -- were still trapped in the bank.

"I lost 16 years of work," he said, crying.
Pena was replaced by Vice President Pedro Alliana, who promised not to abandon the depositors, including pensioners, affected by Ueno's demise.

On the streets of Asuncion there was rejoicing over Pena's ouster.

But news that Alliana, who is from the same right-wing Colorado Party as Pena, would take over angered some demonstrators.

"He's from the same team, he knew about it (the trouble at Ueno)," Edson Vazquez told AFP.

US ally

Handout picture released by Paraguay's attorney general office shows impeached president Santiago Pena arriving for questioning on November 7, 2026

The collapse of Ueno rocked usually stable Paraguay.

Thousands of people took to the streets furiously demanding their money back after the Central Bank took control of Ueno, citing fears for its solvency.

Pena's removal was a further blow for US President Donald Trump's network of allies in South America.

Trump's favorite for Brazilian president, Flavio Bolsonaro, was defeated by left-wing incumbent Lula Inacio Lula da Silva last month.

Alliana will serve out the remainder of Pena's term, which ends in 2028.

(FRANCE 24 with AFP)