Asuncion: In a dramatic political upheaval, Paraguay’s President Santiago Pena has been impeached and placed under house arrest following the catastrophic collapse of Ueno Bank. The digital banking crisis has left approximately 3 million depositors in a state of financial limbo, sparking widespread protests across the South American nation.
The political earthquake began on Tuesday when financial regulators abruptly seized control of Ueno Bank. The digital bank, which had expanded rapidly to become the fifth-largest in the country by deposits, suffered a complete systemic failure.
Lawmakers moved swiftly on Friday, impeaching Pena with a near-unanimous vote of 44 out of 45 senators, including members of his own party. The charges against the former president include conflict of interest, institutional cover-ups, interference in regulatory systems, and the misappropriation of state pension funds.
According to an ABP Live report, parliamentarians accused Pena of using his political influence to channel massive amounts of public funds into the failing bank. “The impeachment proceedings highlighted that the state pension fund had deposited roughly $355 million into Ueno Bank, an amount that significantly exceeded legally permitted limits,” the report stated. In return, regulators allegedly turned a blind eye to the bank’s questionable lending practices and suspicious transactions linked to companies owned by the bank’s proprietors.
Interestingly, Pena had offered to resign on Thursday, but lawmakers rejected his resignation. By opting for impeachment, the Senate ensured Pena was stripped of his legal immunity and lifetime Senate membership, paving the way for a criminal investigation. Prosecutor Silvia Margarita Gonzalez Wester confirmed that Pena will face questioning regarding the misappropriation of state funds and abuse of power.
Pena’s defense attorney, Ricardo Preda, dismissed the allegations, calling them “irresponsible and opportunistic.” However, Pena’s direct ties to the bank—he was a shareholder in the company that owned Ueno Bank until last year—have heavily complicated his defense.
Following the impeachment, Vice President Pedro Alliana was sworn in as interim president, set to serve until 2028. In his inaugural address, Alliana assured the nation that citizens affected by the Ueno Bank collapse would be fully compensated for their losses.
Meanwhile, widespread unrest continues, particularly in the capital, Asuncion, as the country’s population grapples with the realization that half of the nation has been directly impacted by the freezing of savings and pension funds.