I think that's just a business decision that the owner took that has nothing to do with SEO. He wants to business under 2 different names and build two brands, which makes sense on the business side because he can have one brand to target public A and another brand to target public B.
There are many cases where competitors company are own by the same group or person, for example, Walt-Mart and Sam's Club. There is nothing wrong on trying to dominate the whole market that's how capitalism works.
In my opinion, you were hired to build the second brand SEO and is not your job to judge his business decisions or complain because the other brand that he owns already have good links.