A High Court judge branded Chris Foster as being “bereft of the basics of commercial morality” just months before the millionaire businessman’s home was gutted in a suspected arson attack.

Mr Foster’s business dealings are now in the spotlight as detectives attempt to solve the mystery which has seen his £1.5 million home destroyed by fire and his family missing, feared dead.

The 50-year-old was described by neighbours as a “multi-millionaire” who made his fortune developing insulation technology for oil rigs.

His company, Ulva Ltd, was set up in 1998 in Rugeley in the West Midlands. The following year, he secured a £500,000 export deal with help from British Trade International, to supply thermal insulation for an offshore oil rig in Canada.

At the time Mr Foster said his company had an annual turnover of £1.5 million – a figure he expected to double by 2000.

The company appeared to do well, moving into Hortonwood in Telford, before a business deal with a distributor went wrong and ended up before the courts.

In 2003, Mr Foster’s company, Ulva Ltd, had entered into a long-term supply agreement with Cambridgeshire-based DRC Distribution Ltd. Under the contract, fire-resistant cladding for thermal insulation would be supplied to Ulva exclusively by DRC.

According to the court papers of DRC Distribution Ltd v Ulva Ltd, Ulva began to source a similar product from another supplier by 2005, apparently because it was cheaper.

At the same time, Ulva began to settle DRC’s invoices increasing late. The situation deteriorated when DRC claimed breach of contract and Ulva served notice of termination of the contract. A contractual battle ensued and by July 2007, the case ended up before the High Court.

Ulva accepted it was in breach of contract and the judge, in his summation, suggested that “morally” Ulva was in the wrong, leaving DRC out of pocket but in a position to claim back damages, believed to be around £800,000.

However, it appears that Mr Foster, throughout 2007, was moving to protect his business and its assets. He set up a phoenix company, Ulva Holdings, and by early June 2007 transferred the bulk of Ulva’s business to either himself or the new holding company, of which he was the director.

On June 29, Ulva ceased to trade and when HMRC threatened to wind up the company, Mr Foster brought in administrators, thwarting any large claims for damages from DRC Distribution as Ulva Ltd has already been stripped of its assets.

The latest episode also ended up before the courts, after DRC applied to have the administrators removed, alleging they were acting as “stooges” for Mr Foster and had allowed themselves to be used in Mr Foster’s plan to transfer Ulva Ltd’s business and assets.

The Court of Appeal agreed. Lord Justice Rimmer said Mr Foster was “not to be trusted” and ruled he had acted improperly by appointing administrators to protect his own business reputation.

The judge said it was “an asset stripping exercise directed at enabling him to carry on his business through another company with a similar name.”

In May 2008, the judge ruled that the administrators were jointly liable with Mr Foster for the legal costs of DRC Distribution. Ulva Ltd, although still based in Hortonwood, is now owned by the SWP Group of companies and its subsidiary, DRC. Yesterday the company said Mr Foster was no longer connected with the firm.