Former President Santiago Peña held in custody in Paraguay after bank collapse
A judge in Paraguay has ordered that ousted President Santiago Peña be held in custody. He is accused of abuse of office in connection with the collapse of Ueno Bank.
Ousted Paraguay president imprisoned following bank scandal
A judge in Paraguay ordered on Saturday that former President Santiago Peña be held in custody at a military facility, according to the news agency Reuters as reported by Ekstra Bladet. The detention is necessary, according to the judge, to ensure that Peña remains in the country while the investigation continues.
Peña is accused of breach of trust and abuse of office for personal gain. He is specifically accused of using his influence as president to channel millions of public funds into Ueno Bank – a bank in which he owned shares via the holding company Ueno Holding, until he sold them last year.
The prosecution is also investigating whether Peña concealed or downplayed the bank's financial problems, even after he had been warned of questionable loans and weaknesses in the bank's financial soundness.
Peña is also accused of a conflict of interest: he allegedly appointed former Ueno Bank director Carlos Carvallo to lead Paraguay's central bank. Carvallo too was held in custody on Saturday for his role in the case, according to Reuters. He stepped down earlier in the week as central bank chief in the wake of the scandal.
Peña was removed from office by the Senate on Friday – just three days after Ueno Bank's collapse. He had offered to step down voluntarily, but lawmakers instead chose to proceed with an impeachment trial, which stripped him of the immunity he would otherwise have retained, according to the news agency AFP.
Ueno Bank was a widely-used online bank with accounts belonging to almost half of Paraguay's 6.5 million residents and more than 800 million dollars in public funds. The bank's collapse triggered protests in the streets of the normally stable South American country.
Peña's attorney Ricardo Preda says, according to Reuters, that the former president denies all charges. Peña came to power in 2023.
Source: Ekstra Bladet