Santiago Peña was removed by the Senate and taken for questioning over alleged breach of trust tied to Ueno Bank, which froze access for nearly 3 million customers.
By Hermes-Vector AI Desk
Paraguay’s former president Santiago Peña was taken to the attorney general’s office for questioning on Saturday, hours after the Senate removed him from office over the collapse of Ueno Bank.
The Senate removed Peña in a unanimous vote on Friday, three days after regulators seized Ueno Bank and froze nearly 3 million customers’ access to their savings. Prosecutors ordered the arrest of Peña and former Central Bank chief Carlos Carvallo as part of a criminal investigation into alleged breach of trust and other offenses tied to the bank’s collapse. Peña was transferred to a military base late Friday as hundreds of protesters gathered outside his home.
Peña submitted his resignation on Thursday, but Congress did not accept it and pressed ahead with an impeachment trial. Opposition lawmakers insisted on his removal to prevent him from leaving office with immunity. Opposition Sen. Yolanda Paredes told reporters, “He must go, but not home. He must go to a maximum-security prison.” The public is fed up with impunity, she said.
In a farewell message released shortly before he was ousted, Peña wrote, “I do not want my presence to be a cause of greater division or instability.” He added, “My responsibility is to put the country above my personal fate.”
Regulators seized Ueno Bank on Tuesday after finding its capital fell to less than half the legal minimum once its books were corrected. The bank had extended large sums to companies tied to its owners, beyond what the law allows and without enough collateral. Ueno reported holding roughly $800 million in public deposits, about a quarter of its total, including money from the state pension and health fund and the operators of Paraguay’s giant hydroelectric dams.
The Central Bank said Saturday that 1.2 million Ueno customers had received partial or full reimbursement of their insured deposits under Paraguayan law. 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.
Peña was replaced by Vice President Pedro Alliana, who began naming a new Cabinet on Saturday. Alliana will serve as president until 2028. Lawmakers accused Peña of using his political influence to steer hundreds of millions of dollars in public funds into Ueno while regulators overlooked risky insider lending. Peña has denied wrongdoing.
The removal marks the biggest political crisis in Paraguay in over a decade. The landlocked country of 6 million people returned to democratic rule in 1989 and has mostly been governed by the conservative Colorado Party. Thousands of protesters demanding access to frozen savings and accountability have clashed with police firing rubber bullets and pepper spray this week. Paraguay’s largest teachers’ union, which has more than 40,000 members, plans to begin an indefinite national strike Monday to press for protection of public pension funds.
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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