Paraguay's ex-president Peña in detention over banking scandal
Paraguay's deposed president Santiago Peña is being held in pre-trial detention over the scandal involving digital bank Ueno. A judge ordered his detention citing flight risk.
Peña detained in military barracks
Paraguay's former president Santiago Peña is in pre-trial detention. Judge Humberto Otazú ordered this after a hearing, according to Süddeutsche Zeitung. The 43-year-old Peña is being held at a military barracks in the capital Asunción. The judge justified the decision by citing flight risk and the potential obstruction of investigations.
In reaching this decision, the judge also considered what information Peña may have obtained during his presidency regarding the banking scandal and organised crime. Peña made no statement regarding the allegations at the hearing. His lawyer Ricardo Preda rejected claims of flight risk and evidence tampering: Peña was no longer president and therefore could not access information from the state apparatus. Preda criticised the pre-trial detention as "the most drastic of all possible precautionary measures".
Charges of breach of trust and conflict of interest
The public prosecutor's office accuses Peña of breach of trust, self-dealing and conflicts of interest. It also requested the freezing of his assets. The crux of the case: Peña was commercially connected to Grupo Vázquez, which owns Ueno Bank, until spring 2025. As president, he held shares in the conglomerate's holding company, had deposited money with Ueno and purchased a bond issued by a group company.
At the same time, state institutions deposited billions with the bank. The public prosecutor's office argues that Peña influenced the placement of public funds despite profiting personally from the conglomerate. Peña denied conflicts of interest. Investigations are also underway against former central bank chief Carlos Carvallo – he is accused of breach of trust as well as document forgery.
Banking crisis shakes Paraguay
Ueno Bank, a digital bank, grew for years but then entered severe turmoil. Its capital adequacy ratio fell below half the minimum threshold. At times customers could not access their accounts. The central bank initiated a liquidation procedure. Peña was removed as president on Friday through an impeachment procedure in parliament. His predecessor as vice-president, Pedro Alliana, took office and is to govern the country until August 2028. The financial and state crisis is straining the country; citizens are concerned about their savings.
Source: Süddeutsche Zeitung