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Garth Drabinsky leaves the court house in this 2007 file photo.Charla Jones/The Globe and Mail

A tearful Garth Drabinsky did something on Wednesday that he hasn't done in the 14 years since the Livent Inc. scandal broke: He took responsibility for the fraud at the celebrated live theatre company.

But he did so without confessing to directing fraud at Livent. At an emotional – and at times confrontational – parole-board hearing, the co-founder of Livent said his accounting staff perpetrated the fraud without his knowledge, even though they were impelled by the "force of my character."

Mr. Drabinsky, 62, is serving a five-year sentence for fraud after being convicted of misstating Livent's financial statements in every quarter after the live theatre company went public in 1993 until 1998. His partner, Myron Gottlieb, received a four-year sentence, and has been released on day parole. Mr. Drabinsky was granted day parole from prison on Wednesday, effective Nov. 11.

During the hearing, he described his anguish during his first month in the maximum-security Millhaven penitentiary before he was transferred to a minimum-security institution. "It was devastating," he said. "The isolation, the trauma I experienced. I hadn't experienced anything like that since I was three years old when I was moved to isolation and quarantine when I first had polio. It affected me beyond description. Every time that door slammed shut and reverberated. … I was overwhelmed."

He was in tears several times during the parole hearing, and talked at length in response to questions. Board member Carol Fletcher-Dagenais several times asked him to answer directly, to stop offering irrelevant details, and to refrain from unnecessarily mentioning names of prominent people he knows.

The former Livent CEO was especially emotional as he described the impact of the case on his family and the early weeks in custody.

Looking gaunt and drawn, Mr. Drabinsky said he lost 30 pounds in his first eight weeks in prison because he lost his appetite. "When I looked at myself in the mirror in the [prison] library, I didn't recognize myself. … I looked like I had been on a ship coming from overseas on the worst voyage. I didn't understand how much I had deteriorated."

But he said prison also gave him time to reflect on his life in "myriad ways" and re-evaluate his motivations. "I don't need to build empires any more. I've done that," he said, adding that he simply wants to find uses for his creative talents and keep a low profile.

Mr. Drabinsky told the hearing panel he takes responsibility for the fraud at Livent because he was CEO. But he also insisted accounting staff conducted the fraud without his knowledge because he pressed them so hard to maximize profits.

"I never directed anyone to cross over the line knowingly. I obviously did do that by the dynamic of my character – the force of my character coupled with my role in the organization," he said. He added he was never motivated by personal greed, and never cashed out his shares in Livent, which he said remain in a safety deposit box.

Parole-board members challenged Mr. Drabinsky repeatedly on his unwillingness to acknowledge a role in directing the fraud, reading passages from the judge's ruling in the case that concluded he was involved in the fraudulent accounting decisions that affected the company.

However, Ms. Fletcher-Dagenais ultimately said Mr. Drabinsky would be granted day parole – which means he must live at a Toronto halfway house and stay there at night – because he was not considered an undue risk to the community.

Mr. Drabinsky is at Beaver Creek Institution, a minimum-security prison in Gravenhurst, Ont., about 160 kilometres north of Toronto. Federal prisoners are eligible for full parole after serving one-third of their sentences, and for day parole six months before the full-parole date.

Mr. Drabinsky asked the parole board on Wednesday to grant him full parole effective in six months, but the panel said the request for full parole was premature in the circumstances.

Ms. Fletcher-Dagenais said Mr. Drabinsky needs to "demonstrate further insight" and an ability to follow rules. Mr. Drabinsky acknowledged several small incidents in jail where he said he unwittingly broke rules.

Among his day-parole conditions, Mr. Drabinsky is barred from owning a company or being self-employed or from managing money on behalf of anyone else or any organization. He told the parole board he hopes to continue working as a producer, and would also like to teach or lecture. "I want to return to my artistic roots and I want to contribute to the cultural landscape of the country."

He told the hearing he is being supported financially by his brother, Cyril Drabinsky, and said his wife, Elizabeth, and his children have stood behind him. He also told the parole board he has embraced his Jewish faith in prison.

Wednesday's parole hearing was conducted by video conference. Mr. Drabinsky was seated in a hearing room at the Gravenhurst institution, and spoke to parole board staff at their headquarters in Kingston through a video screen.

One of Mr. Drabinsky's parole conditions is that he not be in contact with Mr. Gottlieb. Mr. Drabinsky told the parole board hearing he has "a genuine love and affection" for his former partner.

At its peak in the 1990s, Livent was North America's largest live theatre company, producing musicals such as The Phantom of the Opera, Show Boat, Ragtime and Kiss of the Spider Woman. Mr. Drabinsky continued producing shows even during his trial and while out on bail awaiting an appeal decision. He was artistic director of the BlackCreek Music Festival in Toronto in 2011, and produced the film Barrymore last year, starring Christopher Plummer.