SOURCE: Smith & Nephew PLC

July 31, 2006 10:50 ET

Smith & Nephew PLC announces Re Internal Investigation

London, UK -- (MARKET WIRE) -- July 31, 2006 --



Smith & Nephew statement



31 July 2006





Smith & Nephew plc (LSE: SN, NYSE: SNN) ("Smith & Nephew" or "the Company")
today released the following statement.



Following receipt of the U.S. Department of Justice's investigative subpoena
previously disclosed by the Company on June 30, 2006, Smith & Nephew instituted
an internal investigation in order to cooperate fully with the Justice
Department. Through this internal investigation it has come to our attention
that an independent orthopaedic sales representative under contract to the
Company sent an email on October 28, 2005 to competitors.  That email appears to
have resulted from a hospital's request for proposals from the Company and its
competitors regarding their orthopaedic implant products.  The email proposed to
the Company's competitors that they join in a coordinated response to the
hospital's request.  That email was in clear contravention of Smith & Nephew's
policies and was not authorised by Company management.  To the best of the
Company's knowledge, the October 28, 2005 email was never acted upon by the
Company or any of its competitors in responding to the hospital or any customer
and resulted in no anti-competitive agreement.  The independent sales
representative and the Company no longer have a business relationship.



Smith & Nephew is committed to complying with all laws and regulations and to
having the highest standards of ethical business practice.  Smith & Nephew
continues to cooperate fully with the Department of Justice in this
investigation.



The investigation is ongoing and Smith & Nephew can provide no assurance as to
the final outcome.  Therefore, it would not be appropriate to comment further.
The provision of the information above should not be construed as an intention
on the Company's part to provide further updates except as legally required.





Enquiries


Investors/Media
Deborah Scott
Financial Dynamics - London                     Tel: +44 (0) 20 7401 7646

Media

David Yates                                     Tel: +44 (0) 20 7831 3113
Financial Dynamics - London

Jonathan Birt                                   Tel: +1 (212) 850 5634
Financial Dynamics - New York




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