Stuart Webb, chair of governors at Derby Tertiary College, Wilmorton, stepped down saying he wanted to concentrate on his business. Three colleagues followed a day later citing "professional and business commitments". The Further Education Funding Council is due to publish a report on the awarding of contracts, expenses and the appointment of staff and governors in less than two weeks.
Andrew Stromberg, the Pounds 50,000-a-year principal at the centre of the inquiry, resigned on health grounds in July. Three weeks earlier, The TES revealed how he broke rules on a land deal, allegedly intimidated staff and employed his daughter's boyfriend as a lecturer.
Sources close to the inquiry say it will call on Education Secretary Gillian Shephard to dismiss the whole board, on the grounds that they bear collective responsibility. In doing so the FEFC, which is concerned about standards of competence and probity, will send a warning to other colleges. One lecturer at Wilmorton, which has 9,800 students and 370 teaching staff, described the conclusion as a "dream ticket".
Mr Webb, a former business associate of Robert Maxwell, will be on business in the Far East when the report is published. He denied any knowledge of its contents, saying his resignation was prompted by a libel victory against the Derby Evening Telegraph and the offer of a directorship which would conflict with his college role.
He said: "I don't know anything about the report. I await it with anticipation and will deal with it as and when. I have served five years (as a governor and chairman)."
The three departing governors are local newspaper editor Patrick O'Connor, Tory city councillor Nick Brown and Steve Chittenden, Stuart Webb's solicitor, whose appointment to the board is part of the investigation.
Angela Knight, Conservative MP for Erewash, said: "It puts questions in people's minds as to why these resignations have taken place before the publication of the report. No doubt those questions will be answered soon. "
Also under scrutiny by Professor Michael Shattock, registrar of Warwick University, was the purchase of computer equipment worth almost Pounds 59,000 from a firm which had begun a merger with a company chaired and part-owned by Mr Webb. The interest was only declared after the orders were made. The inquiry took more than four months and involved 60 witnesses and a complete audit of the college's accounts.
The TES revealed in June how Mr Stromberg employed or gave contracts to his daughter's French boyfriend, his gardener and the architect who designed his house extension. Mr Webb's son-in-law was given Pounds 500 to design the Wilmorton logo, without tendering. A lecturer who was made redundant in a controversial restructuring began legal action against the college after her redundancy cheque was stopped; she was reinstated after Mr Stromberg's resignation.