MercoPress. South Atlantic News Agency

Paraguay’s prosecutors charge Santiago Peña and seek his pre-trial detention over the Ueno Bank collapse

Peña, who testified before prosecutors on Saturday, is accused of alleged breach of trust, as instigator, and self-serving administration, as perpetrator

Paraguayan prosecutors on Saturday charged former President Santiago Peña, removed from office by the Senate on Friday, and requested his pre-trial detention in the case over the collapse of Ueno Bank, which froze the savings of nearly three million customers. A judge must rule on the request. Prosecutors also charged former Central Bank president Carlos Carvallo, who is in custody.

Peña, who testified before prosecutors on Saturday, is accused of alleged breach of trust, as instigator, and self-serving administration, as perpetrator. Carvallo, who had been Ueno’s chief executive before Peña appointed him to head the Central Bank, is charged with breach of trust, producing false public documents and self-serving administration. According to prosecutors, between 2023 and 2026 the bank received large deposits from public bodies and the pension system while granting allegedly irregular loans to companies linked to its owners, the Vázquez Group. Peña denies any wrongdoing.

The former president, who had been placed under house arrest after his removal, was moved overnight to the barracks of the Presidential Escort Regiment, responsible for presidential security, after protesters threw stones at police and tore down fences near his residence in Asunción. Police dispersed the protest. Dictator Alfredo Stroessner took refuge in the same barracks in 1989 during the military coup that toppled him.

The new president, Pedro Alliana, began his term with cabinet changes. He appointed Ariel Martínez as interior minister, a post he held under former President Horacio Cartes (2013-2018), and Juan Carlos Baruja, also close to Cartes, head of the ruling Colorado Party, as public works minister. Alliana said he would suspend foreign travel to focus on the crisis and promised that all those affected would recover their savings.

Customers with balances of up to about US$1,500 have begun recovering their money, and payouts will later be extended to an initial maximum of 40 minimum wages, about 121 million guaraníes or US$19,300. Banks will open exceptionally on Sunday so that those affected can open accounts and complete the necessary procedures.

Tension remains high. Protesters and the opposition accuse Alliana of failing to act in time to prevent the bank’s collapse and are also demanding his removal and early elections in early 2027.