Paraguay ex-president charged after Ueno Bank collapse sparks protests
Paraguay's former president Santiago Pena has been charged after questioning at the attorney general's office in Asuncion over an alleged banking scandal linked to the collapse of Ueno Bank. The case has triggered days of protests across the country, with thousands of people demanding access to their savings. Some demonstrations have turned violent, with clashes reported between protesters and police.
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Prosecutors said Pena was charged after spending the morning at the attorney general's office, a day after he was impeached over the affair. According to the supporting material, he was charged with breach of trust and administration for personal gain. Pena was placed under house arrest on Friday, and prosecutors are also seeking pretrial detention for him and for Carlos Carvallo, who was charged on Saturday with breach of trust, producing false public documents and administration for personal gain.
The scandal centres on Ueno, a digital bank that expanded rapidly during Pena's presidency and received more than $800m in public funds. The bank's collapse has left nearly three million people unable to access their accounts, and the supporting material says nearly half the country has been affected in some way. Pena has denied wrongdoing and said the bank's problems were a regulatory matter, while allegations against him include using political influence to direct public money into Ueno and shielding it from scrutiny as concerns grew over risky lending.
The case has become a major political and financial crisis because it combines allegations of misuse of public funds with a loss of confidence in the banking system. It also raises questions about the relationship between political power, regulators and private finance in Paraguay. The impeachment proceedings were accelerated after Pena offered his resignation on Thursday, but lawmakers rejected it and moved ahead so he would not gain political immunity by stepping down.
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The supporting material says Pena held a stake in Ueno's parent company until March 2025. It also says he appointed Carlos Carvallo, a former executive at the company that later became Ueno, as head of Paraguay's central bank in 2023. Those details have become central to the allegations that the bank was shielded from regulatory scrutiny while its lending practices drew concern.
What remains unclear is how quickly account holders will regain access to their money and whether prosecutors will secure pretrial detention for Pena and Carvallo. It is also not yet clear how far the investigation will extend beyond the former president and the central bank appointment. For now, the case remains a live test of Paraguay's institutions as protests continue and the legal process moves forward.
