Lets put this into perspective.
At the end of the day this is plain theft. The management knew what the position of the company was and chose to use creditors and customers money to fund an ill conceived venture. It never added up just like SAW. It was always going to end like this.
The day they used the money from a pre-purchased ticket as they only way to pay a liability was the day they were without doubt technically insolvent.
As for having the regulator decide a companies fate on the basis of financial viability. Give me a break... They can't manage themselves or regulate properly. To now have them as business advisers and assessors or know how to run a company is beyond belief.
I do agree that their job is to make sure all the requirements are met and yes they should be more vigilant when companies are under financial stress. It is a clear indicator but not one on which they should act alone.