A massive embezzlement scandal at a Kosdaq-listed company is sending shock waves among local and foreign investors, as well as regulators and financial firms.

At the heart of the scandal is Osstem Implant, the country’s biggest maker of dental implants, in which foreign investors hold a 44.2 percent stake. The company sued its employee surnamed Lee on Friday for misappropriating 188 billion won ($157 million).

The Korea Exchange, which operates the benchmark Kospi and tech-heavy secondary market Kosdaq, suspended trading of Osstem stocks on Monday. A flurry of developments ensued, amid mounting worries about potentially big losses for the investors involved.

On Wednesday police arrested the man -- a senior manager of the company‘s finance team -- in Paju, Gyeonggi Province. Despite the scale of the money he allegedly stole from Osstem, the police nabbed the suspect fairly quickly -- a fact that both relieved and puzzled investors at the same time.

Even from the perspective of observers, it is hard to understand how the suspect managed to embezzle 188 billion won, which is equivalent to 91.8 percent of the company’s equity of 205 billion won as of the end of 2020.

The scandal marks the biggest ever embezzlement case involving a listed company in Korea, and the trade suspension on its stock is feared to hurt as many as 20,000 individual investors. The damage could be devastating if the company gets delisted.

The Korea Exchange is set to make a decision on the dental implant maker’s listing eligibility and announce the result by Jan. 24.

On Wednesday, Osstem CEO Um Tae-kwan issued a statement and apologized to shareholders and investors for the incident.

But investors remained infuriated, accusing Osstem and related financial authorities of failing to detect signs of irregularities in advance through internal auditing and regulatory monitoring.

On social media and online communities, investors raised questions about the possibility of multiple people’s involvement, directly or indirectly, in light of the scandal’s sheer scale.

Earlier, the company stressed that the suspect Lee acted alone, but local media outlets reported Thursday that Lee’s family members suggested he “had received orders from his superiors.” This claim has to be thoroughly investigated by the police.

Another question is how financial regulators could not see any sign of foul play at a listed company. In a nation where any transactions of over 10 million won at banks are subject to regulators’ monitoring for possible tax evasion, the suspect Lee used stolen corporate funds to buy a 7.6 percent stake in another Kosdaq-listed firm, Dongjin Semichem, in October last year and cashed out most of his shares by the end of the year.

Lee is also said to have gifted several buildings in Paju to his wife and relatives, and paid for loans linked to the real estate purchases through the funds he stole from Osstem.

Lee’s apparently unusual transactions, as well as his purchase of gold bars worth 68 billion won on six occasions in December, did not raise any red flags at the country’s authorities, at a time when better monitoring is in order amid the red-hot popularity of stock investment among Koreans.

Police should not only track the whereabouts of the stolen money but also get to the bottom of the case, identifying what went wrong. Financial authorities are also required to come up with countermeasures to better protect investors.

Of course, it is Osstem that should take full responsibility. A group of retail investors are already moving to file a joint suit seeking compensation. The company must take proper steps to address the make-or-break scandal, even if it’s as painful as pulling teeth.