Paraguayan prosecutors have charged former President Santiago Peña with criminal association over his alleged role in the collapse of the digital bank Ueno, adding a new count to existing breach-of-trust and self-dealing allegations a week after Congress removed him from office. The 47-year-old former leader is in pretrial detention at a military facility and denies all charges. Prosecutors allege he used his position to direct millions in government funds to Ueno and concealed or downplayed its financial troubles despite warnings about risky lending, while he had financial ties to the bank.
Key Takeaways: Peña faces a new criminal-association charge after Congress removed him from office and he was arrested; he denies wrongdoing. Ueno held more than $800m in public funds and its collapse locked customers out of accounts, triggering nationwide protests. Fitch has placed Paraguay’s sovereign rating on watch for a possible downgrade, while the central bank says savings have been returned to more than 1.8m depositors.
The case has deepened a political and financial crisis in Paraguay. Peña, who entered office in 2023, held a stake in the bank’s holding company until last year. Ueno grew rapidly under his presidency from a financial technology company into a large firm handling state pensions and accounts of several government entities. On Thursday, investigators raided his official residence in the capital, Asuncion; the prosecutor’s office said agents from the economic crimes unit were extracting data and gathering relevant information for the investigation.
Last week, Peña tried to step down as president, but Congress rejected his resignation and instead removed him from office through impeachment. He was arrested shortly after his removal. The collapse of Ueno left customers locked out of their accounts, prompting huge protests across the country as thousands demanded accountability and their money back. Prosecutors have been searching for missing funds and said on Friday that assets had been located abroad, although they did not specify in which countries. They had previously asked the United States, Luxembourg and Argentina for help locating the missing money.
“The necessary steps are under way to request that they be frozen,” prosecutor Francisco Cabrera told reporters. Three former central bank officials were also arrested on Friday, accused of having known about Ueno’s issues since late last year. The central bank said on Thursday it had returned savings to more than 1.8 million people who deposited money at the bank.
The financial fallout is still unfolding. Fitch has placed Paraguay’s sovereign rating on watch for a possible downgrade, which would make it more expensive for the government to borrow money. The next legal steps are expected to focus on the frozen assets abroad, the former central bank officials and the broader question of how Ueno handled more than $800m in public funds.
Source: www.aljazeera.com