If he was asked to wait for the TD and a ruling was called for, and I asked the dealer what happened. If the dealer explained it how you did I would disqualify him.
What would you do with his chips?
Would they just be removed from the tournament?
Unfortunately although it will change the dynamics if it was a "very big pot", yes.
I would not advise any TD to try and split chips or reconstruct action as this is a slippier road and would lead to too many complications later in that comp and even later in other comps.
He would be awarded the pot as the last man standing with live cards and would be awarded a penalty, the penalty is for refusing to show and would be awarded after the hand. The penalty is enhanced from not showing when trying to influence a decision after the floor has been called (grabbing pot, mixing own chips in and deliberately mucking cards deep as to not be recovered). Disco'd and chips removed.