Paraguay’s former president charged after bank collapse

Prosecutors in Paraguay have charged former president Santiago Peña over his alleged role in a banking scandal that led to his impeachment. He has been accused of breach of trust and of administering the government for personal gain. Peña, who denies any wrongdoing, was forced out of office after a bank collapse triggered a crisis that left more than half the country’s population without access to their accounts.

Lawmakers, including members of his own party, unanimously voted to remove him from office minutes after the collapse of Ueno Bank, which has links to his private business interests. He offered to step down, but senators refused to accept his resignation and instead impeached Peña, charging him with misconduct and stripping him of the immunity usually granted to ex-presidents.

Peña, who held shares in the company that owned the bank until last year, has denied any wrongdoing. The impeachment charges that led to Peña’s removal alleged he had conflicts of interest, manipulated regulatory oversight, diverted pension funds, and participated in an institutional cover-up involving the central bank. Peña’s deputy, Pedro Alliana, has been sworn in as the new interim president and promised not to “abandon” the millions of people affected by the scandal.

“Compatriots who are now going through a difficult time as a result of the financial collapse will be fully compensated,” said Alliana, who will serve as president until 2028. The digital bank’s demise left more than half of Paraguay’s population without access to their savings after Paraguay’s central bank seized it. Long lines of people trying to withdraw money from Ueno branches snaked down the streets of the capital, Asunción, on Tuesday and Wednesday.

An estimated three million depositors remain unable to access their savings and pensions, prompting public outrage, particularly in the capital, Asunción. Protests erupted across the country, with thousands taking to the streets on Thursday to demand their money. Earlier demonstrations featured clashes with the police, who used tear gas and water cannons on the crowd.

Peña’s impeachment passed, with 44 of 45 senators voting in favour. One lawmaker was absent. “It was never my intention to betray the trust you placed in me,” Peña said in a video posted on X announcing his resignation, adding his priority was “the peace of mind of Paraguayans who entrusted their savings to our financial system”. Afterwards, Senate President Basilio Núñez said Peña was found guilty of “dereliction of duty”.

Pedro Alliana takes the oath of office as interim President Senator Rafael Filizzola said: “We are facing the biggest corruption scandal in our democratic history – a tremendous blow to the state, to private citizens, and to the country’s credibility and image.” Analysts say Peña is likely to now be prosecuted over the bank’s collapse. His defence lawyer Ricardo Preda described the allegations as a “reckless accusation” that was “irresponsible and opportunistic”.