Former Paraguayan President arrested over collapse of one of the country's largest banks
Paraguay's Public Prosecutor's Office has indicted former President Santiago Peña and placed him under preventive detention in connection with his responsibility for the Odebrecht banking scandal, which triggered a widespread economic and political crisis.
Translated by Qiyas from الراي — Original source
The Public Prosecutor’s Office in Paraguay on Saturday filed charges against ousted President Santiago Peña, who was placed under pretrial detention amid allegations of his involvement in a banking scandal.
Following a hearing with Peña, Judge Hernán Otazú told reporters that he had ordered the former president to remain in pretrial detention at the same facility in Asunción where he was held after being removed from office on Friday.
The banking crisis, which quickly escalated into a political crisis, erupted on Tuesday when the Central Bank placed the once-thriving digital bank “Ovuno” under guardianship due to its financial troubles.
The Central Bank’s intervention froze the deposits of nearly three million people, the number of customers declared by the bank, representing roughly half of Paraguay’s population. The impact also extended to companies, institutions, and pension funds.
Peña, who had ties to the group controlling the bank, had offered his resignation.
However, lawmakers proceeded with impeachment proceedings to strip him of the political immunity he would have enjoyed had he stepped down voluntarily.
He was succeeded in office by his vice president, Pedro Alliana, who pledged not to abandon the rights of depositors, thousands of whom took to the streets in protests demanding the return of their money.
Peña, who assumed power in 2023, held shares in Ovuno Holding, the parent company of the bank, before selling them last year.
Peña is also accused of a conflict of interest for appointing former Ovuno bank executive Carlos Carvalho to head Paraguay’s Central Bank.
Ricardo Breda, Peña’s lawyer, denied the allegations against his client, clarifying that the decision to deposit government funds in banks is not made by the President of Paraguay, but by a minister.
