• Analysis
Santiago Pena Charges Over Ueno Bank Collapse: Depositors Receive Refunds
Former Paraguayan president Santiago Pena was charged on Saturday with breach of trust and mismanagement for personal gain over his links to Ueno Bank, and taken into pre-trial custody, while the Central Bank said more than half of the bank's customers have recovered their funds after the collapse.
The charges against Pena
Santiago Pena, Paraguay's impeached former president, was charged on Saturday over his business links to Ueno Bank in a case at the heart of the santiago pena charges ueno bank collapse, which locked millions of people out of their money. Prosecutors accuse him of breach of trust and mismanagement for personal gain.
- •Pena owned shares in Ueno Holding, the bank's holding company, until he sold them last year.
- •He is accused of using his influence as president to steer millions in government deposits to Ueno Bank.
- •He is also accused of hiding or downplaying the bank's financial woes despite warnings about questionable loans and solvency issues.
- •A further conflict-of-interest accusation concerns his naming of former Ueno Bank director Carlos Carvallo to run Paraguay's Central Bank.
The bank held accounts for nearly half of Paraguay's 6.5 million people and more than $800 million in government funds, which is why so many savers were hit at once when it failed.
Custody and the defense
Judge Hernan Otazu ordered Pena taken into pre-trial custody at the Asuncion facility where he was held after Friday's removal from office, and froze the assets of both Pena and Carvallo. Pena declined to make a statement during Saturday's hearing, according to the judge.
Carvallo faces the same charges as the former president, plus one count of falsifying government documents. Pena's lawyer Ricardo Preda denied the accusations, arguing that in Paraguay it is not the president but rather a minister who decides where government money is deposited.
Depositors getting money back
For the bank's customers, the picture is starting to change. The Central Bank said it began paying out money to Ueno customers and that more than 50 percent have recovered their funds.
Not everyone has been made whole. Giovanni Catolinom, a 40-year-old travel agency owner, said around $16,000 of his money was still trapped.
"I lost 16 years of work," he said.
The payouts continue as part of the response to the paraguay banking crisis, which sent thousands into the streets after the Central Bank took control of Ueno citing solvency fears.
What comes next
Pena, removed by the Senate on Friday just three days after the collapse, was replaced by Vice President Pedro Alliana. Alliana will serve out the remainder of Pena's term, which ends in 2028, and has promised not to abandon depositors, including pensioners.
The succession has not satisfied everyone. Alliana is from the same right-wing Colorado Party as Pena, and that angered some demonstrators. Protester Edson Vazquez said of him: "He's from the same team, he knew about it (the trouble at Ueno)".
The Central Bank continues paying out to Ueno customers, with more than 50 percent already refunded, while Pena remains in pre-trial custody pending proceedings.
