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Kaoru Hanabishi is actually the second character in Ai Yori Aoshi to be named so, the first being the male lead, who in childhood was engaged to Aoi Sakuruba, the female lead. This was intended to unite their wealthy families and all their holdings. The two Kaorus are in fact half-brothers, though it is never revealed who was born first, or why both had the same given name. The narrative offers some possible context clues.
Both Kaorus were the sons of an unnamed father who was the original heir of the Hanabishi Zaibatsu, but who died or otherwise left the scene for good after the boys were born to different mothers. Given the strict nature of the boys' paternal grandfather, it is not impossible that somehow their father was merely banished. Also unknown is if either of the boys' mothers were ever married to the father. In any event, their grandfather seemed to disapprove of both women, and ended up choosing the series' lead (to be called Kaoru-1 as needed) as his heir. This caused much consternation and rage to Kaoru-2's mother, who may have been angling for her son to be the heir all along. This resentment may explain the two boys being named the same, as Kaoru-2's mother might have named him to spite and hopefully replace Kaoru-1 entirely. It is indicated that the rejected mother and son lived poorly, with the mother always telling her son the other Kaoru had stolen his destiny. This was a resentment that Kaoru-2 accepted and embraced, and was apparently enhanced when news of Kaoru-1's engagement to Aoi Sakurba reached them.
But all was never well with Kaoru-1. The grandfather, strict to the point of being reactionary, ended up forcing Kaoru-1's mother to leave them, feeling her presence weakened him, with her death by car accident making this permanent. The boy held onto his mother's memory to the point he was often caned across the back by the grandfather who demanded he spurn it. When Kaoru-1 was a young adult, he could endure no more, and left his family entirely. After a time, he encountered Aoi Sakuruba again, only then realizing his childhood friend had also been his fiancee, and that when he left the family, the engagement was cancelled by the grandfather. Still caring for and in love with Aoi, Kaoru-1 moved into a property the Sakurubas owned, all under the watchful eye of Aoi's guardian Miyabi Kagurazaki. In time, female friends of Kaoru also moved in, which forced the two to keep their engagement a secret, one of the terms Aoi's disapproving father had demanded.
While the events of the romantic comedy/harem series played out in somewhat typical fashion, in the background, events of a darker nature kept on. Perhaps realizing that his behavior had driven his heir away, Grandfather Hanabishi began to suffer poor health, and called for his other grandson to be recalled and made his heir. It also seems possible his aides recalled Kaoru-2, as the grandfather was shown to be in an addled state as time went by. Seeking to confront his past, Kaoru-1 finally visited his grandfather, only to find him a broken old man, not worth calling out for his wrongs. Not long after, the grandfather died, though with Kaoru-1 still legally designated as the heir, and set to take over both companies should he marry Aoi Sakuruba.
This, coupled with his long-time resentment, spurred Kaoru-2 to seek alliance with Aoi's father. Aoi, like her mother before her, had been raised as a Yamato Nadeishko, known to some as the ideal Japanese wife, yet also capable of wising up a foolish husband. While respectful, Aoi's mother had supported her daughter's pursuit of Kaoru-1, seeing her once-meek child become fierce in his defense. Despite this, she went along with the scheme of Kaoru-2 and her husband, which began by deceiving Aoi into believing her father had taken deathly ill. Responding, she was waylaid by Kaoru-2, who kept her at the Hanabishi estate, while telling a girl raised to perfect obedience that her father had now betrothed her to him, and that this was the best for all involved, even Kaoru-1. Aoi, heartbroken, began to be convinced.
Gathering up his friends, Kaoru-1 broke into his family's estate, rallying the shaken Aoi back to his side. To settle the matter once and for all, the young couple sadly renounced their families and fortunes entirely, with Kaoru-1 telling his half-brother he conceded his claims to the family holdings. Kaoru-2 was doubly surprised when his half-brother made a gracious inquiry about his mother, and was glad to hear she was still alive. No more was heard of Kaoru-2 after this.
While far from being a truly malicious villain, Kaoru-2 does stand out as nearly the only villain in a very light series, joined only by Aoi's father when he deceived her about his health, and the two Kaorus often-abusive, controlling grandfather in his prime. Also stepping him back from deep villainy is the apparent loss of vengeful thought once he got what he wanted in terms of inheritance. Whether the two brothers ever met again or possibly reconciled is not known. In the end, Kaoru-2 also became the only Kaoru Hanabishi, since, when Kaoru-1 and Aoi married, they used the name Honjou, which was the family name of Kaoru-1's deceased mother.