Paraguay Ousts Santiago Peña, Places Him Under House Arrest After Ueno Bank Collapse

Paraguay’s Senate removed President Santiago Peña from office on Friday, November 6, over his conduct in the collapse of Ueno Bank, a digital lender tied to his former business interests. Authorities placed him under house arrest minutes after the vote. Vice President Pedro Alliana was sworn in to serve out the presidential term, which ends in 2028.

The bank’s collapse earlier in the week left about three million depositors unable to access savings and pension payments and prompted protests, particularly in the capital, Asunción. Peña, who until last year held shares in the company that owned Ueno Bank, has denied wrongdoing.

Peña Offered to Resign. The Senate Removed Him

Peña announced on Thursday that he would submit his resignation, saying he wanted to preserve stability and reassure people who had entrusted their savings to the financial system. In his address, he apologised and said “it was never my intention to betray the trust you placed in me”.

The Chamber of Deputies nevertheless voted unanimously to initiate impeachment proceedings. The Senate then held a fast-tracked trial and voted to remove him, stripping him of the immunity normally afforded to former presidents. All 44 senators present backed removal, including members of his own Colorado Party. One senator was absent. Senate President Basilio Núñez said Peña had been found guilty of “dereliction of duty”.

Peña was absent for the final vote. His lawyers, Adolfo Ferreiro and Ricardo Preda, represented him after the Senate rejected their request for another 72 hours to prepare. Preda called the allegations a “reckless accusation”.

Three Criminal Cases Follow the Bank Collapse

The impeachment charges alleged that Peña had conflicts of interest, interfered with regulatory oversight, diverted pension funds and participated in a cover-up involving Paraguay’s central bank. The attorney general opened three separate criminal cases against Peña and several former officials in connection with the collapse, CNN reported.

Prosecutor Silvia Margarita González Vester said Peña was due to be questioned on Saturday over allegations of breach of trust, influence peddling and misappropriation of funds. Those allegations are separate from the Senate’s finding of misconduct in office.

Peña took office in August 2023 for a five-year term, becoming one of Paraguay’s youngest presidents. An economist, he had previously served as a central bank director and as finance minister from 2015 to 2017.

Alliana Promises Full Compensation

Paraguay’s central bank took control of Ueno after a severe solvency crisis forced the lender to shut down. The bank had about 2.9 million customers in a country of roughly 6.1 million people, CNN reported. The loss of access to savings and pensions brought protesters onto the streets as the case moved through Congress.

After taking office, Alliana said Paraguayans affected by the collapse would be “fully compensated”. His remarks gave depositors a commitment, but no timetable for when they could recover their money.

Peña had been a close regional ally of US President Donald Trump. Following the transfer of power, a US State Department spokesperson said Washington would continue to work with Paraguay on shared priorities, CNN reported.

With inputs from ANI & agencies