Former Broadway theater mogul Garth Drabinsky has been granted day parole and will be released to a Toronto halfway house to serve the remainder of his sentence for fraud following an emotional hearing on Wednesday where he denied guilt and said he never should have been CEO.

The Parole Board of Canada's two-member panel said Drabinsky, the high-profile producer of "Ragtime" and other Broadway hits, does not pose an undue risk to public safety, but denied his application for full release, calling it premature.

The ex-CEO of the now-defunct Livent Inc. testified for nearly three hours via video link from the minimum-security Beaver Creek Institution in Gravenhurst, Ontario.

Drabinsky, 62, could be seen crying and hugging his family following the decision.

"Thank you from the bottom of my heart," said Drabinsky, his voice overcome with emotion.

Drabinsky is prohibited from operating a business and associating with co-accused Myron Gottlieb.

He said his incarceration since last September has been devastating.

"It affected me beyond description," he said. "Every time the lead door slammed shut and reverberated I was overwhelmed."

In 2009, the Tony award-winning producers were both convicted of two counts of fraud each for a book-cooking scheme. Drabinsky was sentenced to five years and Gottlieb to four years. Drabinsky lost his appear last September.

Livent was once the largest live theater company in North America. It once owned or controlled theaters in New York, Chicago, Toronto and Vancouver and its Broadway productions have won 14 Tony Awards and have been nominated for dozens more.

The Toronto-based company filed for bankruptcy protection in 1998 after the fraud was revealed when former Walt Disney Co. President Michael Ovitz invested in Livent.

Authorities said the cooked books helped build millions of dollars in shareholder value that was lost when the fraud was revealed by the new management team headed by Ovitz.

At the parole hearing, in his first public statements since Livent's collapse 14 years ago, Drabinsky repeatedly denied that he intentionally committed fraud or that it occurred out of greed. However, he admitted that the employees had been pressured by him to maximize profits at the company, and ultimately, it was his "gross negligence" that makes it his responsibility as the head of Livent.

"I drove people tremendously hard in the company," he said. "I drove them to succeed through my flawed ambition and creative hunger, which was not grounded in greed. I pushed the envelope too far."

He said he did not know that what was being done by the company's accountants "crossed into criminality.

Drabinsky said he had suspected that there were inaccuracies in the company's financial statements but due to his lack of accounting practices, he "walked away from the details."

"I should never have been CEO of the company," he said. "That was a mistake."

Drabinsky sobbed when he told the parole board that he was contacted last August by the Governor-General's office about stripping him of his Order of Canada, one of the country's highest honors.

Drabinsky and Gottlieb were fired and Livent filed for bankruptcy protection. The two were indicted in the U.S. in 1999 on charges that they had misappropriated millions of dollars from U.S. investors. In 2002, Canadian authorities charged the two, alleging investors and lending institutions were duped into providing more than $500 million Canadian to Livent.

Drabinsky and Gottlieb still face charges in the United States but Drabinsky's lawyer has said they cannot be extradited to the United States to face them because they've been found guilty on the same charges in Canada.

Livent's lavish productions included "Kiss of the Spider Woman," ''Show Boat," ''Barrymore" and "Phantom of the Opera."

Drabinsky started his career as an entertainment lawyer and later was chairman of the Cineplex Odeon movie theater chain. Throughout the 1990s, he had been considered one of the most ambitious and forceful personalities in the Canadian entertainment industry.

Once granted parole, the man who used to rub shoulders with Hollywood elite said he wants to keep a "low profile" and continue producing movies and stage productions.

"Forget about building any empires anymore," said Drabinsky. "I already did that."