Arsenal scouts reportedly watched McGregor in action for Rangers in the 2-0 win at Hibernian on Wednesday.
Smith said: “How do you know they were watching him? There are probably about 20 scouts here tonight so how do you know they were watching Allan McGregor? Were they all watching him?
“We have 20 scouts at every home game, it’s a natural thing that they come to football matches.
“I’m sure Arsene would have phoned me if he was wanting to take him and you will be the first to know if he gets in touch!”
