Correct option is C
Option (c) "have shocked everybody" contains a grammatical error.
Explanation: The subject "The news" is singular, and therefore, the verb should be "has" instead of "have" to agree with the singular subject.
Correct Sentence: The news of his involvement in illegal activities has shocked everybody.
Grammatical Rule Used: Subject-Verb Agreement - A singular subject takes a singular verb, and a plural subject takes a plural verb.
Example: The report of the accident has caused widespread concern.