If he has the IMEI no. of the phone, the whole phone will depending on the brand (nokia/samsung/sagem) either become useless (not start up) or block all signal so noone can phone that phone or no-one can phone from it. Changing sim card will not affect it because the IMEI is on a once writetable chip on the phone (older phones the IMEI can be changed quite easy but new phones are alot harder to change the IMEI, and D500's are very new models).
BUT the phone can be used outside your country and it will work fine. So if anyone nicked it they cud sell it abroad.
It is possible 2 change the IMEI but with very hi-tech equipment that i doubt many people will have + changin IMEI no. can get ya 5yrs inside.
If your mate does block it, then find it sometime, he can fone up the network and get it unblacklisted.
Hope this helps ya