Statement re SFO investigation

Severn Trent Plc announced today that as a result of a referral by Ofwat, the
Serious Fraud Office is undertaking a criminal investigation into alleged
reporting irregularities made to Ofwat by Severn Trent Water Limited between
2000 and 2003.

Ofwat has been conducting its own investigation following allegations made by
an employee of Severn Trent Water. Ofwat began its investigation into the
allegations in January 2005. The matter reported to the SFO concerns data on
leakage.

Severn Trent is supporting Ofwat in its review of these allegations and will
co-operate fully with the Serious Fraud Office.

In May 2004 an employee of Severn Trent Water raised a number of allegations
relating, in particular, to alleged accounting inaccuracies and regulatory
returns. PricewaterhouseCoopers LLP Forensic Services was appointed by Severn
Trent Plc to carry out a thorough and independent investigation and in the
light of their findings Severn Trent Plc announced on 22 November 2004 that the
Board was, and remains, of the view that the matters raised have no effect upon
the integrity of the accounts and that Severn Trent Water's customers have not
been overcharged. However, a disciplinary investigation was instigated which,
though substantially complete, is likely to continue at least until Ofwat's
review of these matters is completed.

The Board has taken and will continue to take such actions as it thinks
appropriate to ensure the maintenance of both high ethical and professional
standards.

For further information contact:

Peter Gavan, Director of Corporate Affairs, Severn Trent Plc

0121 722 4310