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Paraguay’s former president Santiago Peña has been taken into custody following his removal from office over his alleged involvement in the collapse of a major bank, which left millions of customers unable to access their savings.
A court on Saturday ordered Peña’s pretrial detention as prosecutors investigate allegations of breach of trust and misuse of public funds for personal gain.
The crisis centres on the collapse of Ueno Bank, whose financial troubles reportedly affected nearly three million customers across the country.
Prosecutors allege that Peña used his presidential influence to direct public funds into the private lender despite concerns over its financial stability. They also accused him of benefiting from financial links to the bank’s parent company.
Peña, however, has denied any wrongdoing and pleaded not guilty. His lawyer said he would cooperate with the investigation.
The former president was initially placed under house arrest before being transferred to a military facility following protests outside his residence.
The Senate removed Peña from office in a unanimous vote on Friday, following which Vice President Pedro Alliana was sworn in as the country’s new president.
Peña had maintained close ties with Israel and reopened Paraguay’s embassy in Jerusalem in December 2024, making the country one of the few nations to take such a step.
The banking collapse has triggered widespread protests and a political crisis in Paraguay.
