Paraguay’s Ousted Leader Pena Detained; 2.94M Clients Locked Out

(MENAFN) A Paraguayan judge ordered ousted President Santiago Pena held in preventive detention Saturday, escalating the fallout from the collapse of Ueno Bank, which froze the deposits of 2.94 million clients, nearly half the country’s population.

Judge Humberto Otazu ruled that Pena must remain at the Presidential Escort Regiment headquarters in the capital.

The ruling followed a formal filing by the Prosecutor’s Office, which charged Pena with breach of trust, illicit enrichment through self-dealing and falsification of public documents.

Pena was questioned for nearly three hours at the State Attorney General’s Office, then returned to military police custody.

He was first arrested late Friday at his private residence, where police moved in to disperse protesters gathered outside. He spent the night under guard at the Presidential Escort Regiment.

The arrest came after the Senate voted Friday to remove him from office for “misconduct in office” and “poor performance of duties” over his administration’s handling of the financial crisis.

The crisis began Nov. 3, when the Central Bank of Paraguay (BCP) stepped in at Ueno Bank, citing severe insolvency. The freeze hit critical public institutions and pension funds, including the state-run Social Security Institute. The abrupt loss of liquidity triggered mass street protests in Asuncion, which police dispersed.

Prosecutors allege that Pena’s administration allowed high-risk public deposits to flow into the private lender beyond legal safety thresholds, tying his government directly to the bank’s failure.

Meanwhile, newly sworn President Pedro Alliana, the former vice president and a fellow Colorado Party member, began his first full day in office Saturday. His administration faces immediate pressure to make good on promises of full compensation for depositors, with its focus on stabilizing the financial system and restoring public trust.

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