Over the past five years, Banco Verde Paraguay has transformed from a small financial institution into a leading digital bank in Paraguay, serving over 60% of the adult depositors in the country. This month, the bank suddenly faced a financial crisis and was taken over by authorities. President Santiago Peña tried to avoid impeachment by resigning, hoping to preserve his immunity. However, his attempt failed, and he was removed from office by Congress.
On November 6th, the Paraguayan prosecution ordered the arrest of dismissed governor Peña and former central bank president Carlos Carvalho. The related criminal investigation focuses on charges such as fraud related to the collapse of Veno Bank.
The prosecution sent a letter to the Director General of the National Police, requesting the police to execute the detention order. According to the order, Peña will be monitored at his residence until he is transferred to the Economic Crime and Anti-Corruption Prosecution Department for questioning. Cabral, on the other hand, is being detained at the police station.
On November 3rd, regulatory authorities took control of Venovo Bank. The deposits of nearly 3 million depositors (the country's population is approximately 6.37 million) were frozen, which triggered a political crisis. This also led the long-serving Red Party to turn against Pena. The former IMF economist’s situation has taken a dramatic turn for the worse.
Not long ago, he received support from a number of powerful politicians in that country. A few weeks ago, when he visited Washington, he was regarded as an important ally of the Trump administration. He also made inappropriate remarks regarding the Taiwan issue.
After the bank crisis, on the 5th, Peña submitted his resignation to avoid being impeached, but his request was denied by the congress. Opposition lawmakers insisted on procedurally removing him from office, in order to prevent him from leaving with immunity.
The right-wing political party affiliated with Peiyan holds the majority seats in both houses of parliament.
Just minutes after Peña announced his resignation, the House of Representatives passed the impeachment bill with 78 votes in favor and 0 votes against. The impeachment bill was then sent to the Senate.
The leader of Congress was originally expected to accept his resignation later in the evening on Thursday, allowing Vice President Pedro Ariana to skip the Senate trial and take office directly.
But the opposition senators still insist on completing the impeachment process. They believe that if Peña is allowed to resign, he will retain his lifetime senator status, and the associated legal immunity might exempt him from prosecution.
