STW Announcement

Severn Trent PLC
22 November 2004

Severn Trent Plc
22 November 2004

In May 2004 an employee of Severn Trent Water raised a number of allegations
with the Company relating in particular to accounting and regulatory returns to
Ofwat. The Board of Severn Trent Plc appointed external forensic accountants
from PricewaterhouseCoopers to conduct an independent investigation into the
matters raised.

Ofwat was immediately informed of the investigation, kept continually updated
and was subsequently provided with PricewaterhouseCoopers' findings at the end
of September.

Having reviewed the results of the investigation, the Board has concluded that
these issues have had no effect upon the integrity of the Group's accounts and
that water customers have not been over-charged.

Notwithstanding the above, the investigation revealed prima facie evidence of
some behaviour that the Board believes falls short of the high standards it
expects from employees. Accordingly, a disciplinary investigation has been
instigated and other action is being taken as necessary.

Severn Trent is committed to maintaining ethical and professional standards
which support compliance with laws and regulations and seeks to safeguard
effectively the interests of customers and shareholders.

Severn Trent's Code of Business Principles and Conduct is applied in a
professional manner ensuring that all those affected are treated fairly and
equitably. No comment is made publicly unless and until it is appropriate to do
so.

For further information, contact:

Peter Gavan, Director of Corporate Affairs, Severn Trent Plc
Simon Holberton, Brunswick Group
0121 722 4310





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