A judge in Paraguay ordered banking superintendent Holger Insfrán held before trial on Friday, November 13, as prosecutors investigate alleged misconduct in the Ueno Bank case.
Economic-crimes judge Humberto Otazú approved the prosecution’s request after a hearing. He rejected Insfrán’s defense request for less restrictive measures. Insfrán will first be held for 15 days at the National Police’s Specialized Group facility.
The Justice Ministry will then choose a prison where he will remain detained. He was arrested the previous day. He was charged with aggravated breach of trust over his alleged handling of warnings he received while leading the Central Bank’s banking-supervision arm.
Prosecutors allege he was formally warned on April 29 about violations of lending limits involving companies linked to Ueno Bank, including Mowi SA, Grupo Hendy SA and Grupo M SA. The firms’ combined obligations were reportedly about 743.8 billion guaraníes, equal to 31.9% of the bank’s effective capital. That was above the stated legal limit of 20%.
Investigators also question whether a June transfer of loan assets actually fixed the bank’s situation. Prosecutors suspect the transaction may have involved financing connected to Ueno. The detention order is a measure taken before trial, not a finding of guilt.
The investigation into the bank’s operations and supervision is continuing.