A potential investigation of News Corp. by the British Serious Fraud Office (SFO) may be turn out to be more devastating to Rupert Murdoch than allegations of phone hacking and bribery.

Former minister Tom Watson urged SFO to investigate, telling them that payments made to police officers were a “gross misuse of shareholders’ money.”

“Underpinning that web, must have been some murky payments,” Channel Four’s Faisal Islam reported Sunday. “It was shareholders’ money that was used to make some of these payments.”

“Obviously, things like phone hacking, police bribery are going to get all the headlines. But if you think about what’s been watched from America and the shareholders of News Corp. in America — a company that, remember, the Murdoch’s only own 12 percent of but they control because of some strange voting rights — the shareholders are increasingly annoyed. This is just the sort of investigation, although it won’t have impact in what the police do here, it might well change the equation as to regards to the shareholders who are increasingly annoyed at what’s going on here and the role of the Murdoch’s within News. Corp.”

Watch this video from Channel Four, broadcast July 17, 2011.