Paraguayan President Santiago Peña has been removed from office and reportedly placed under house arrest following a financial scandal linked to the collapse of digital lender Ueno Bank, which left millions of customers unable to access their savings.
Peña was arrested on Friday shortly after Paraguay’s Senate voted overwhelmingly to impeach him over allegations of misconduct and involvement in the financial crisis.
The president had offered to resign a day earlier, but lawmakers opted to proceed with impeachment proceedings, accusing him of failing to discharge his responsibilities and abusing his position. The motion received 44 votes in favour out of 45 senators, with one legislator absent. Senate President Basilio Núñez subsequently announced that Peña had been found guilty of dereliction of duty.
The controversy follows the collapse of Ueno Bank earlier in the week, after its operations were taken over by Paraguay’s central bank. The development reportedly disrupted access to savings and pension funds for approximately three million depositors, triggering demonstrations across the country, particularly in the capital, Asunción.
Investigators and lawmakers have raised questions about Peña’s alleged financial interests in the institution, noting that he held shares in the company that owned the bank until last year. The former president has denied any wrongdoing.
The impeachment charges included allegations of conflicts of interest, interference with regulatory supervision, misuse of pension funds and involvement in efforts to conceal the financial institution’s difficulties. Prosecutor Silvia Margarita Gonzalez Vester said Peña was expected to appear for questioning on Saturday over allegations including breach of trust, influence peddling and misappropriation of funds.
Following his removal, Vice-President Pedro Alliana was sworn in as interim president and is expected to serve until 2028. In his first address after taking office, Alliana pledged that affected customers would receive compensation for losses arising from the banking crisis.
Meanwhile, Senator Rafael Filizzola described the scandal as one of the most significant corruption controversies in Paraguay’s democratic history, warning of its impact on public confidence and the country’s financial credibility.
Peña’s defence lawyer, Ricardo Preda, dismissed the accusations as reckless, describing the impeachment process as irresponsible and politically opportunistic.
Before his removal, Peña had addressed the nation, expressing regret over the crisis and insisting that betraying the public’s confidence had never been his intention.
