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The documents entered into evidence at the trial of Livent Inc. co-founders Garth Drabinsky and Myron Gottlieb do not prove a fraud occurred at the company and raised no red flags when the two accused saw them, a defence lawyer argued Wednesday.

Lawyer Dave Roebuck, part of Mr. Drabinsky's legal team, began his closing arguments Wednesday by attacking a slew of documents entered into evidence by the Crown. The documents are internal company reports which the Crown said summarize improper manipulations made between 1993 and 1998.

But Mr. Roebuck said the wording on the documents is vague and the brief phrases used in the reports could have benign meanings.

He said the documents only appeared sinister in retrospect after six former employees testified the reports showed manipulations. He said the witnesses were not credible because they were part of the fraud.

“The documents do not speak for themselves,” Mr. Roebuck said. “The documents clearly do not tell the same story to every reader.”

Mr. Drabinsky and Mr. Gottlieb are charged with fraud and forgery in connection with misstatements of Livent's financial statements between 1993 and 1998. Both men have pleaded not guilty and have suggested former Livent executive Gordon Eckstein conducted the fraud on his own initiative and gave them plausible explanations for his accounting manipulations.

Mr. Roebuck said the documents entered into evidence contain words that can be legitimate accounting treatments under some circumstances, and said the Crown called no experts to testify the various accounting terms have a universally negative meaning.

For example, he said the documents refer to “roll forwards,” or amounts transferred from a current period to a future period to defer an expense, which the Crown said was an improper method used to bolster profits. Mr. Roebuck said there are legitimate ways that expenses can be rolled forward and the fact the term appeared on internal documents did not raise a red flag.

“You have to be in-the-know to understand the connotation,” he said. “It's not a beacon, it's not a flashing light when you see the word.”

Similarly, Mr. Roebuck said reports showing summary columns of “actual” financial results and “reported” financial results were unclear, and Mr. Drabinsky and Mr. Gottlieb wouldn't have known that the difference between the two sets of figures was due to fraudulent manipulations.

He added Mr. Drabinsky was enormously busy as the producer of Livent's successful live theatre productions and travelled constantly, so he was not able to closely monitor all the accounting decisions. He was also not a chartered accountant, Mr. Roebuck said.

Mr. Roebuck also challenged the Crown's submission that some of the documents included Mr. Drabinsky's handwriting on them.

He said the Crown did not call experts to prove it was his handwriting, relying only on identifications provided by suspect former employees who were involved in the fraud.

Lawyer Edward Greenspan, also representing Mr. Drabinsky, is expected to continue closing arguments Thursday.