Diamond in a Shoe: The Jacob Diamond



We have all heard of the famous Kohinoor diamond, which is currently housed in the Tower of London. But did you know that there is another diamond, double the size of the Kohinoor, still in India?

This diamond belonged to the Nizam of Hyderabad, who was also once the richest man in the world. But what makes the diamond even more interesting is how it was found – it was discovered in a shoe – and the man it was named after, a very mysterious Mr Jacob. How did all this happen? Let’s find out.

The story of Jacob diamond is the story of three very interesting characters, Mahboob Ali Khan, the 6th Nizam of Hyderabad, his Armenian valet Albert Abid, and a mysterious jeweller named Alexander Malcolm Jacob. As if this cast of characters was not intriguing enough, the diamond, in the 1890s, caused quite a scandal!

Mahboob Ali Khan
Mahboob Ali Khan|Wikimedia Commons

Before we get to this riveting tale, a bit of perspective. For over 2,000 years, India was the world’s diamond capital. There is mention of diamonds from as far back as the 4th Century BCE, in the famous Indian text Arthashastra, a treatise by the great kingmaker Chanakya or Kautilya. The Romans loved Indian diamonds. Pliny, the Elder, who wrote Natural History in the 1st century CE, writes of the ‘Adamas’ or diamonds. He says, ‘Highly valued of human possessions, let alone gemstones, is the Adamas, which for long was only known to kings, and to very few of them.’

While diamonds from India were famous all over the world, the biggest mystery, which has not been solved to date, is exactly where they were found. Where were the actual diamond mines in India? Most of these diamonds appear to have originated in the Krishna-Godavari delta in present-day Andhra Pradesh. However, for centuries, the location of these mines was a well-guarded secret.

The most famous story is that of ‘Valley of Diamonds’ strewn with diamonds somewhere deep within India. According to these stories, it was hard to find this ‘valley’ and only a few brave souls survived the expedition.

Krishna River Gorge, Andhra Pradesh
Krishna River Gorge, Andhra Pradesh|Wikimedia Commons

The valley was also said to have been infested with poisonous cobras. There are tales about how canny merchants would drop large chunks of meat into the valley so that the diamonds would stick to the meat, and send eagles after them. These trained eagles would pick up chunks of meat and being them back to the merchants, who in turn would collect the diamonds stuck to the meat!

This fantastical story, which started as folklore, travelled far and wide, even finding mention in The Adventures of Sindbad, The Sailor. In one adventure, Sindbad finds himself in a cobra-infested valley of diamonds and escapes by tying himself to the feet of a giant eagle. Marco Polo, the Venetian traveller who came to India and visited the Andhra region in 1293 CE, also wrote about this legend in his account, and through him, the legend spread across Europe.

By the 16th century, Indian diamonds were popularly known as ‘Golconda diamonds’ after the Qutub Shahi Kingdom of Golconda. The kingdom covers the modern-day region of Hyderabad and these diamonds were found in the rich alluvial soil along the Krishna river. Any diamond that was larger than a certain size had to be deposited in the king’s treasury.

Mir Qamar-ud-din Khan
Mir Qamar-ud-din Khan|Wikimedia Commons

By the 18th century, the diamonds from the Krishna valley delta was depleted. This was also the time when Mir Qamar-ud-din Khan, the Mughal Viceroy of the Deccan, established his own semi-independent kingdom and proclaimed himself the first Nizam of Hyderabad in 1724. The vast wealth of the Deccan would make his descendants, the successive Nizams, the richest men in the world!

Mir Mahboob Ali Khan, the sixth Nizam of Hyderabad, ascended the throne of the richest and most powerful kingdom in Hyderabad in 1869. A kind and compassionate man, he was famous in Hyderabad as ‘the beloved’ king. There are stories of him, travelling in disguise through the city and helping people in need.

It is said that he was so generous that no one who came to him for help returned empty-handed. While he was generous with others, Mahboob Ali Khan also loved the good things in life. After all, he could do both without making a dent in his riches! The Nizam also had a special fascination for collecting diamonds.

Golconda (1902-03)
Golconda (1902-03)|Wikimedia Commons

Mahboob Ali Khan’s right-hand man was his valet, an Armenian named Albert Abid. The famous Hyderabadi historian D F Karaka would note, ‘Everytime Mahboob Ali Pasha unfastened a button, or changed a garment, Abid was there. He had to be there. His Highness could not do without him’. As a valet to the Nizam, Abid’s duties included looking after the Nizam’s clothes, shoes, watches, jewellery and other accessories. It is said that 12 servants used to dress the Nizam and Abid used to supervise them.

But Abid also took advantage of his position. Since the Nizam never wore the same suit twice, Abid would help himself to his master's clothes and other goodies and then, he would sell them back to the forgetful Nizam, who never remembered what he owned, as new!

Abid made so much money cheating the Nizam that he started a large store in Hyderabad, run by his wife. The store was named ‘Abid’s’. Today, the entire area where the shop was located is known as ‘Abid’s’.

Department store at Abid Circle in Hyderabad circa 1897
Department store at Abid Circle in Hyderabad circa 1897|Wikimedia Commons

Due to his privileged position, Abid took hefty commissions from traders who wanted access to the Nizam. The protocol was, the items would be presented to the Nizam, and he would utter just one word – either ‘Passand’ (approved) or ‘Na Passand’ (disapproved). The former would be bought regardless of the price, while the latter were rejected.

While all this was unfolding in Hyderabad, up north in Shimla, where the British capital would shift every summer, there was a gems and antique dealer called Alexander Malcolm Jacob. He was famous all over British India as an eccentric man who had deep secrets. No one knew where he came from or what he did. Some whispered that he was a Russian spy, others thought he was a magician who dabbled in occult arts and could even walk on water. Such was the mystery and drama around him that many British writers of the time would include him as a character in their novels, including Rudyard Kipling in his novel Kim.

Jacob was also the most important dealer of antiques and jewels to the Maharajas and high-ranking British officials. Through Abid, he had been in regular touch with Mahboob Ali Khan and had sold several jewels to him at highly inflated prices. Jacob was delighted to find a rich and gullible prince from whom he could earn huge sums of money!

Cover of John Zubrzycki’s book on Mr Jacob
Cover of John Zubrzycki’s book on Mr Jacob

In 1891, Jacob was preparing to crack the biggest deal of his life. He had planned to buy the 184.75 carat ‘Imperial’ diamond, which had been recently mined in South Africa, from a consortium in London for Rs 21 lakhs, and sell it to the Nizam for Rs 50 lakhs. He also promised Abid a commission of Rs 5 lakhs, if the deal went through.

With Abid’s help, Jacob met the Nizam, who told him he would buy the diamond, which was then in London. The condition was that the Nizam would be free to decide whether or not he liked the gem, that is, he could still say ‘Passand or Na Passand’.

The Nizam then transferred a bank deposit of Rs 23 lakhs to Jacob so that the diamond could be transported to India. Meanwhile, the story of the Nizam’s interest in buying the diamond had reached the ears of the British government through spies in the Nizam’s palace.


The British government was worried about Mahboob Ali Khan’s extravagant spending and dissuaded him from buying such an expensive diamond. The Nizam’s prime minister too was against such a deal.

In July 1891, Jacob met the Nizam in his palace. He shrewd Jacob presented the diamond to him on a silver tray covered in red velvet. Mahboob Ali Khan took the stone in his hands, glanced through it a few times and uttered just two words, ‘Na Passand’. Jacob was aghast. The biggest deal of his life had fallen through.

What happened next is hazy and mired in controversy. A few days later, Jacob sent a telegram to his bank, asking them to transfer money to London as the Nizam had agreed to buy the diamond. He would later claim that the Nizam had told him, through Abid, that ‘na passand’ was just a formality to fool the British and he actually wanted to buy the stone. However, it appears the Nizam changed his mind and asked for his deposit back. Jacob refused, claiming that the deal had been done. This led to a long-drawn and bitter court case for the money.


A smart man, Jacob had hired some of the best lawyers in British India, and he gave the Nizam quite a run for his money.

The case was a long and expensive one, and created a sensation across India and even in the international press. A special commission was even sent to Hyderabad to take the Nizam’s statement.

Never before had an Indian prince appeared before a British court and it was considered a matter of great shame. The Jacob diamond, as it had come to be called, would be widely dubbed as ‘manhoos’ or ‘unlucky’ in Hyderabad. Eventually, Jacob was acquitted by the court on charges of fraud but he did not receive the balance payment.

After the case, Mahboob Ali Khan wanted nothing to do with the manhoos Jacob diamond, so he wrapped it in a dirty cloth and stuck it in an old shoe. It was pushed to the back of a drawer.

 Mir Osman Ali Khan
Mir Osman Ali Khan|Wikimedia Commons

Mahboob Ali Khan died in 1911, and it is said that his son and successor, Mir Osman Ali Khan, the last Nizam of Hyderabad, found the diamond in his father’s shoe. He, in turn, believe it or not, used it as a paperweight! Irrespective of its size and value, the Jacob diamond had brought such an embarrassment to his father that even the new Nizam didn't want to have anything to do with it.

Finally, after decades, the Jacob diamond was transferred to a trust, and in 1995 acquired by the Government of India. It is in the vaults of the Reserve Bank of India in Mumbai.

Albert Abid made so much money cheating his master that he brought a huge country estate in England, where he settled with his family. Alexander Jacob not only lost money in the Jacob diamond case but also his reputation. Most of his customers abandoned him. He would sell his shop and live the rest of his life as a wanderer.

The Jacob diamond’s fascinating history and the cast of characters that surrounds its gripping story make it one of the most intriguing diamonds in the world.

Join us on our journey through India & its history, on LHI's YouTube Channel. Please Subscribe Here

Live History India is a first of its kind digital platform aimed at helping you Rediscover the many facets and layers of India’s great history and cultural legacy. Our aim is to bring alive the many stories that make India and get our readers access to the best research and work being done on the subject. If you have any comments or suggestions or you want to reach out to us and be part of our journey across time and geography, do write to us at contactus@livehistoryindia.com

Subscribe to our
Free Newsletter!

Subscribe to Newsletter!

Join our mailing list to receive the latest news and updates from our team.

close