Paraguayan President Santiago Peña is under criminal investigation and faces a Senate impeachment trial following the collapse of Ueno Bank, which left millions of depositors unable to access their money.
Paraguayan President Santiago Peña is under criminal investigation and faces a Senate impeachment trial following the collapse of Ueno Bank, a major digital bank linked to him.
Paraguay’s Attorney General Emiliano Rolón Fernández ordered three criminal investigations into the Ueno Bank crisis, including allegations involving Peña and other current and former government officials, according to the prosecutor’s office. The investigations will examine authorities’ oversight of the bank, their handling of its failure and the placement of public funds in the lender.
The lower chamber of Congress approved Peña’s impeachment, accusing him of “serious and systematic dereliction of duty” in connection with his dealings with the bank. The Senate later announced that it would start an impeachment trial. Peña said he would present himself in the trial and defend himself: “I will do so with arguments and evidence, with respect for the Constitution and the institutions of the Republic,” he said.
Peña announced his resignation on Thursday, saying he was stepping down in the interest of “the stability of our country, social peace and the need to preserve our democratic institutions.” Both houses of Congress declined to accept his resignation, with the Senate instead deciding to press forward with a trial that could result in the president’s removal from office. If he is removed, Vice President Pedro Alliana would replace him as Paraguay’s leader.
Ueno Bank, which claimed more than 60% of Paraguay’s adults as customers, was seized by the central bank after its capital fell to less than half the legal minimum. The central bank found poorly documented lending to companies linked to the bank’s owners, as well as expenses the bank had wrongly counted as assets.
The bank’s app, cards and transfers went dark and its branches locked their doors, leaving depositors lined up outside. A state guarantee fund must repay stranded depositors within five business days, starting with small accounts of up to about $1,600. The fund insures up to about $36,000 per customer, which the central bank says will cover the full balances of an estimated 97% of clients.
A judge ordered six Ueno executives, including founder Miguel Vázquez and bank President Juan Manuel Gustale, jailed pending trial and two others placed under house arrest. Prosecutors have charged 27 bank officials and associates with breach of trust and attempted fraud.
The collapse has left millions of depositors, retirees and workers scrambling to recoup frozen savings and unpaid wages. The Labor Ministry estimates the collapse has affected about 7,000 direct and indirect jobs at the bank and its related businesses. The impeachment trial could remove Peña from office and affect his legal protections, as opposition senators argue that allowing him to resign would preserve his eligibility to become a senator for life, with legal protections that could prevent his prosecution.
Sources
This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.
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