Bristol Crown Court heard that Vielstone and Gatooma homes in Devon had a room where residents were left alone, often without food and water.
Paul Hewitt, 70, denies charges of conspiracy to detain and falsely imprison residents.
Mr Hewitt also said he was unaware that residents missed meals and he would have "made sure" they were fed.
The court heard that a woman resident said she had been tied up in the room at Gatooma in Holsworthy
Mr Hewitt, from Teignmouth, said he would not approve of this, telling the court: "Absolutely not. Mechanical restraint was a no no."
He also denied stopping residents making home visits as a punishment.
Mr Hewitt said he purchased Gatooma in 2004 for residents with behavioural issues.
"It was about giving them a better quality of life," he said.
"They had been in hospital or locked units. We wanted them to be free to be part of a community set up and be free to go to the shops or the pub."
Mr Hewitt, founder of Atlas Project Team Ltd, ran the two care homes for adults with learning disabilities.
He sold the business in 2006 but continued to be in charge, the court heard.
Mr Hewitt and employees Lee Farrant, 30, James Lawson, 41, Julie Barlow, 51, and Aaron Jones, 33, all from Devon, deny a series of charges against seven residents at Vielstone near Bideford and Gatooma in Holsworthy between 2010 and 2011.
Mr Lawson denies eight charges of false imprisonment, Mr Farrant six charges of false imprisonment and Mr Jones and Ms Barlow three charges each of false imprisonment.
The trial continues.

The 30-inch sword was found by Goran Olsen, a hiker who found it when he sat down to rest.
Experts say it's in surprisingly good condition after surviving hundreds of years of frost and snow.
The ancient weapon will be able to help archaeologist work out how people lived in Viking times.
The sword will go on display at the University Museum of Bergen.

The Court had postponed the second round of voting amid allegations of electoral fraud.
Mohammed Nasheed, who was forced from office in an alleged coup last year, won 45% of the vote, falling short of the total needed to avoid a run-off.
Mr Nasheed came to power in 2008 in the country's first free elections.
The country's highest court annulled the 7 September result by a majority decision of 4-3, an official told reporters outside the courthouse.
Any run-off vote should be held before 4 November so that a new president can take office by the 11 November deadline, the official said.
Qasim Ibrahim, who came in third in the first round of voting, had asked the court last month to void the results citing electoral fraud.
Local and international observers had described the first round of voting as free and fair.
Mr Nasheed had needed more than 50% to avoid a run-off against his nearest rival, Abdulla Yameen, who won 25% of the vote.
Mr Yameen is the half-brother of the Maldives' former President Maumoon Abdul Gayoom, who led the country for 30 years.
Just hours before the court ruling on Monday, masked men set fire to the studios of pro-opposition television station Raajje TV, which is known to support Mr Nasheed.
The boss of two care homes said he was unaware vulnerable residents were being locked in so-called punishment rooms.
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A twelve hundred year old Viking sword has been found buried in rocks in southern Norway.
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The Maldives Supreme Court has annulled results from the first round of voting in presidential elections, and called a fresh ballot by 20 October.