Jacob Diamond: Twice The Size Of The Kohinoor, But This Nizam Used It As A Paperweight

Last Updated:July 28, 2025, 14:34 IST

Hyderabad’s Nizam once used the Jacob Diamond, worth crores, as a paperweight. Today, this massive gem is secured by the Government of India in Mumbai

Amid the scandal, Mehboob Ali Khan hid the Jacob Diamond in an old shoe and years later, Mir Osman Ali Khan found it and used it as a paperweight, indifferent to its worth. (News18)

Mir Mehboob Ali Khan, the sixth Nizam of Hyderabad (born 1866), ascended the throne at just three and ruled until 1911. Known for his fondness for Western culture, luxury cars, clothing, and etiquette, he held one of India’s grandest royal courts.

Among his prized possessions was the Jacob Diamond, reportedly the world’s fifth-largest, twice the size of the famed Kohinoor, the latter now part of the British royal crown.

How A Diamond Found Its Place In A Shoe

The stunning tale of the Jacob Diamond centres around Mehboob Ali Khan, his Armenian servant Albert Abid, and the mysterious jeweller Alexander Malcolm Jacob. In the 1890s, the diamond sparked widespread scandal, not least because of its unusual discovery, wrapped in a shoe and tucked away for years.

Albert Abid, the Nizam’s personal servant, oversaw his master’s wardrobe, jewellery, and personal effects, managing twelve other attendants. Deceptively, Abid sold the Nizam’s used clothes back to him as brand new. Over time, this earned him enough wealth to establish a sprawling shop in Hyderabad known simply as ‘Abid’, later giving the locality its name.

Alexander Malcolm Jacob operated from Shimla during the hot season as a collector and trader of gems and antiques. He was rumoured to be a magician, or even a Russian spy!

In 1891, he acquired the 184.75‑carat ‘Imperial’ diamond for Rs 21 lakh, intending to sell it to the Nizam for Rs 50 lakh. A promise of Rs 5 lakh commission to Abid was also made should the deal succeed.

Though the Nizam initially agreed in principle to the transaction, the British authorities intervened, forbidding such a lavish purchase. The Nizam’s own Prime Minister also opposed it.

When Jacob eventually presented the gem, the Nizam declared that he did not like it. Jacob claimed this was a ruse to deceive the British, but the Nizam demanded his money back. Jacob’s refusal led to drawn‑out litigation.

Courtroom Spectacle: A Scandal Across Empires

The dispute escalated into an international sensation. Jacob hired top legal counsel, and the case became the first time an Indian prince was summoned before a British commission for testimony; an extraordinary embarrassment. Though Jacob was ultimately acquitted of fraud, he never reclaimed the full amount.

From Shoe To Paperweight To National Treasure

Following the trail of scandal, Mehboob Ali Khan wrapped the Jacob Diamond in a rag, kept it in an old shoe and stored it in his wardrobe drawer. His successor, Mir Osman Ali Khan, later found the gem and repurposed it as a mere paperweight, showing scant regard for its size or value.

Decades later, the diamond was placed into a trust and eventually acquired by the Government of India in 1995 for over Rs 13 crore. It now resides securely at the Reserve Bank of India in Mumbai, Maharashtra.

Fate’s Irony: Triumphs And Downfalls

Albert Abid’s deceptions led him to amass significant wealth, ultimately settling in England with his family. Conversely, Alexander Jacob lost not just money, but reputation, forced to close shop and spend his remaining days as a drifter.

These entwined lives and the diamond’s curious path make the Jacob Diamond one of the world’s most compelling royal gems.

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