Wow! That is a really shitty situation for your friend... But did he ever have any experience with setting up a company? I mean, in any other country? Running a company from a different jurisdiction, okay... But doing all the legal stuff without receipts, tax declarations, etc., that's just negligence...
On the other hand, you are right that not giving a chance to have a place to stay is a bit brutal from the government side... I suppose they will sue him, and in the end, he will have to pay for his mistakes...

As my mother was an accountant, she had a similar case where the owner forced her to do some illegal accounting stuff, which was so blunt and ridiculous... In the end, he wanted to blame my mother for that, but the judge didn't believe him, of course... lol...

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