The mysterious Mr Jacob… and the diamond that ruined him

Mumbai is home to what is known as the Jacob Diamond, the world’s fifth largest polished solitaire, weighing 184.75 carats or about 40 grams valued at around Rs.1000 crore. The first owner, Jacob, gave the diamond its name. In early 1891 he procured the stone from a jewellery syndicate in Amsterdam through their agent in London. Thereafter, he sold the stone to the 6th Nizam of Hyderabad.

The Nizam initially paid an advance. Jacob by then had paid the full price to the European company. When Nizam refused to pay him the agreed price, Jacob had no option but to accept a hugely discounted price because in India there was no buyer who could afford to pay the price. The financial debacle and the long legal battle ruined Jacob.

Curiously, the stone did not seem to matter much to the Nizam either. He apparently kept the ‘Manhoos Hira’ in one of his slippers. The 7th Nizam used it as a paperweight. In 1995, the Indian Government purchased the diamond from Nizam’s Trust for a sum of 13-million-pound-sterling. Today the Jacob Diamond is held securely in the vault of the Reserve Bank of India in Mumbai.

On 10 January 1921, a short obituary notice was published in the Bombay edition of The Times of India to mourn ‘Mister A.M. Jacob’, aged seventy-one years. He was buried at the Sewri Christian Burial Ground (on plot number 13, Row B2, Church of North India section), no mention was made of any grieving family member or the cause of death.

Jacob, who brought into India a diamond which is bigger in size than the Koh-i-Noor, died a pauper. A man whose life provoked over a hundred newspaper articles and three major books, died unknown as a recluse in Mumbai.

Alexander Malcolm Jacob was an art dealer, a jeweller and a hustler, a confidante of several British Viceroys, Indian royals and imperial civil servants. He was also known to Asaf Jah—the 6th Nizam Mir Mahboob Ali Khan—the ruler of Hyderabad between 1869 and 1911.

The diamond he brought to India in early 1891 is believed to have been found in an African mine by a security guard and was smuggled out. It was then bought by a ‘Syndicate’ in Europe and was cut in a rectangular cushion-cut, with 58 facets.

The 7th and the last Nizam of Hyderabad, Mir Osman Ali Khan, is believed to have found the diamond in one of the shoes of his father Mir Mahboob Ali Khan at Chowmahalla Palace and used it as a paperweight for a long time. Jacob had sold this diamond to Nizam Mir Mahboob Ali Khan. Though the Nizam had paid an advance of Rs. 25 lakh, he refused to pay the rest of the amount, citing lack of funds.

It is believed he was forced to repudiate the sale because of palace intrigue and pressure from the then British Resident in Hyderabad.

The Nizam however surreptitiously took delivery of the diamond later in an undeclared and unconfirmed compromise. But, by then Jacob had been ruined, having lost his reputation and his clients. The only saving grace was that he was acquitted of any wrongdoing and the jury found him not guilty of any fraud.

A romantic career ends in poverty’, wrote The Statesman, Calcutta, in his obituary of 12 January 1921. The newspaper had reported extensively on the ‘Jacob Diamond trial’. It was almost impossible to write about Jacob’s life with sobriety, the obituary said, ‘so amazing was his history and so extraordinary the stories which had grown up around him’ that people might believe or reject the legends about Jacob as a wonder worker but of his eminence as an art dealer and jeweller there were no question.

Contemporary news reports described him as a Persian living in Shimla, an Armenian, a Greek or a Turk and even as a Gypsy. Jacob neither denied nor confirmed any of them. Some avid researchers claim that Rudyard Kipling in his novel, Kim, had created the character of Lurgan Sahib of the British Secret Service after Jacob. American author F. Marion Crawford is said to have written the novel Mr Isaacs about him in 1882. And, as recently as in 2012, Sydney-based journalist John Zubrzycki wrote a biography, a page turner, ‘The Mysterious Mr Jacob: Diamond Merchant, Magician and Spy’.

He had apparently bought the diamond for Rs. 21 lakh and planned to live off the profits from this ‘last sale’. He had planned to sell it to the 6th Nizam Mir Mahboob Khan for Rs. 50 lakhs. The Nizam claimed he had paid an advance but retained the right of refusal if he did not like the diamond.

Confident of the quality, Jacob paid for the diamond in cash and personally took it to Hyderabad to present it to the Nizam. To his shock, the Nizam refused to pay saying it was smaller than what he had imagined. He wanted his advance back. It has been speculated that the British Resident was suspicious of Jacob, who, he thought, was a Russian spy and pressurized the Nizam to repudiate the sale. Or the Nizam was trying to bargain for a lower price.

A Calcutta court issued a warrant for Jacob’s arrest after the Nizam charged him with fraud. The British government banned Jacob from dealing with any of the Indian princes, effectively cutting him off his gem, jewellery and antique business. Jacob was acquitted of all charges by the Calcutta High Court but it had no jurisdiction over Nizam’s Hyderabad and Jacob never received a penny more than the advance from the Nizam. The British government refused to intervene in a private deal. By then Jacob was close to bankruptcy. Heartbroken, he shifted to Bombay where he stayed in the building where Phillips Antiques is at the Regal Circle in Colaba. He then shifted to the now defunct annexe of the Watsons Hotel and died a recluse in 1921.

For 100 years, the grave has remained hidden in the dusty environment of the cemetery. His spirit is possibly secure in the vaults of the Reserve Bank of India.

(This article was first published in National Herald on Sunday)