Whether legal action/police enquiry can take place even if the full and final settlement is done?

My friend is terminated from his private sector co and he received his full and final settlement from that organisation, but now he is under fear that the organisation may take action against him such as legal action or police enquiry.
He got show cause notice and on 30th day of the notice he got a letter from organisation stating that he is terminated from the organisation and pls contact hr for full and final settlement of his dues.
So his concern is whether such type of legal action/police enquiry can take place even if the full and final settlement is done.
Request your views on the same.

What was written in termination letter?
What is the basis for such fears?
Unless and until some reason is there police enquiry or legal action cannot take place.
On what grounds were show cause notice was issued?
what was the reply.
You have to give full details for proper answer.
Your question is incomplete and gives rise to more questions for clarity.