Rumours were rife five years ago when Leonid Rozhetskin went missing from his villa in the Baltic resort of Jurmala.

Had he been the victim of a KGB hit ordered by his powerful enemies in Moscow? Had the multimillionaire faked his death and escaped into witness protection in the US?

The truth now seems closer after police announced that DNA tests on a decomposed body found in a forest in Latvia last year had confirmed it was that of the Russian-born American citizen, who co-founded the London business freesheet City AM.

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Rozhetskin’s credit card had been found with the remains.

The businessman’s mysterious disappearance has been the subject of rumour and speculation for years. He went missing on 16 March 2008 from his £2m villa in Jurmala, Latvia. Two men had came to the house the night before and the next morning, the caretaker found broken furniture and blood splatters on the floor. The caretaker and a guard were detained in the murder investigation but have not been charged.

After the disappearance, the list of potential suspects was long. Rozhetskin had upset powerful figures in the Russian business world over several controversial deals, including his acquisition with American billionaire George Soros of a 25 per cent stake in the government telecommunications company Svyazinvest in a 1997 tender that was criticised as unfair.

He was also a notorious man-about-town who partied with models, including his wife, Natalya Belova, and hosted the annual Bal des Fleurs gathering on the French Riviera for the Russian beau monde.

But Rozhetskin’s most scandalous deal – and the one some have speculated may have led to his death – was the sale by his investment bank in 2003 of a 25 per cent stake in MegaFon, one of Russia’s largest mobile operators, to the Alfa Group, the owner of its main rival. All of MegaFon’s other shareholders vehemently opposed the deal, including the Bermuda-registered investment fund Ipoc, sparking litigation in Switzerland, Bermuda, Russia, Sweden and New York.

In court, Alfa Group alleged that Ipoc actually belonged to then-Communications Minister Leonid Reiman, a friend of Vladimir Putin’s and reportedly the most powerful man in Russia’s telecommunications industry. Mr Reiman has denied these claims, but a Zurich arbitration panel said in 2006 that Ipoc’s beneficial owner was an unnamed “high-ranking officer” overseeing communications regulation in Russia.

Ipoc is currently being investigated by Finnish police for allegedly receiving millions of dollars in laundered money embezzled from the Russian government.

The apparent clash between Rozhetskin and Mr Reiman over the deal led some to speculate that the businessman was killed by Russian agents. His mother Elvira Rozhetskina told the Daily Mail in 2008 that Rozhetskin, who had been on a crusade to expose government corruption in Russia and was making a film about the mafia, was constantly on the move for fear of his life. Rozhetskin had founded a Hollywood production company in 2007 and produced films including the comedy Hamlet 2.

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“Leonid said he could never be safe in any country where Moscow had connections,” his mother said. “My son hated corruption and that is why he was killed... This was a professional hit by hired Russian agents.”

Latvia is a reputed hotspot for Russian organised crime and secret service activity.

After the MegaFon deal, the Moscow prosecutor general opened a case against Rozhetskin for fraud and embezzling the $40m that Ipoc had paid his investment bank as part of previous options agreements to buy the MegaFon stake.

In 2006, the authorities ordered his arrest, forcing the tycoon to flee abroad. Rozhetskin said Reiman had initiated the criminal case and sued the Communications Minister in a court in New York for allegedly threatening him to obtain the MegaFon stake, and claiming $500m in damages.

Shortly before he went missing, Rozhetskin had ensconced Ms Belova, and their three-year-old son, Max, in a £3m high-security flat in London.

But although he had enemies, some believe Rozhetskin faked his death despite the reported identification of his body.

Latvia’s former police chief believes the tycoon is still alive. “There is too much here that doesn’t add up,” he said.

Moreover, almost immediately after Rozhetskin went missing, his £9m plane left Latvia on a globetrotting adventure that reportedly took in Vienna, Geneva, Norway, Newfoundland and Luton.

When Rozhetskin first went missing, the Kommersant newspaper quoted a former executive at a communications company who knew the tycoon as saying that his disappearance was probably a staged “preventative measure”.

“It seemed that he continued to fear revenge from his former MegaFon partners and was constantly thinking about preventative measures. His disappearance with traces of blood could be one such measure, so that everyone would recall and write about who was threatening Leonid Rozhetskin’s life in what way, and who might want to get him back for something,” the executive said.

Another associate, Vladimir Smolyaninov, said he was told that his former business partner had undergone plastic surgery in Miami and was living under an assumed name somewhere in the Caribbean. Other rumours have suggested Rozhetskin fled to the United States as part of the FBI’s witness protection programme. He was even reportedly spotted in Thailand last year.