Apart from "the right thing", one might see this particular behaviour as "quite polite".
It is also better for the relationship. It signifies trust. And every time you hold something back (or lie) you risk damaging a relationship. In this instance, a recruiter might reach out to the employee some other way. The recruiter and employee would then figure out that the business owner may have withheld the mail, even though it was clearly addressed to the employee.
Sure he's not trying to tell you something? :-|