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Fifty-three years ago the richest man in the world deposited £1m in a London account. It's been there ever since, and today it could be worth £80m. But no one can lay a finger on it. Luke Harding on a tale of sex, greed, international politics - and the NatWest bank
In 1948, an Indian maharajah deposited £1m - in those days, a staggeringly large sum - with the Westminster Bank in London. The Nizam of Hyderabad, as he was known, cut a curious figure. A frail, tiny man, and a devout Muslim, he was notorious for his meanness - he wore the same tattered fez for 35 years, dressed in rumpled cotton pyjamas, and ate all his meals off a tin plate, while sitting on a mat in his bedroom surrounded by overflowing wastepaper baskets. But he was also, back then, the richest man on the planet.
In his palace gardens in India, trucks loaded with gold ingots lay rusting. His jewellery collection was said to be so large that the pearls alone would cover all the pavements of Piccadilly Circus. The collection included the legendary Jacobi diamond, a 185-carat gem the size of a lime, and heavier even than the Kohinoor - and the Nizam used this diamond, wrapped in old newspaper, as a paperweight.
The Nazim's family had ruled Hyderabad since the early 18th century, and he was the only maharajah in British India who enjoyed the title Exalted Highness - a reward for his generous £25m contribution to the British exchequer during the first world war. His austere appearance also masked his prodigious appetite for sex. By placing hidden cameras in the walls and ceilings of his guest quarters, he had managed to assemble India's largest collection of pornographic pictures, and in his lifetime he impregnated at least 86 of the mistresses who resided in his busy harem. According to family sources he sired more than 100 illegitimate children.
When the Nizam deposited this £1m in London, he was in a tricky political situation. As the Muslim ruler of an Indian territory the size of England and Scotland, he was attracted by the idea of joining the new state of Pakistan. But there were several obstacles. Most of his 20m subjects were Hindus. And his huge landlocked kingdom was thousands of miles away from the new Muslim homeland over in the Punjab.
While the Nizam dithered, the man to whom he had entrusted the £1m, his finance minister Moin Nawaz Jung, took matters into his own hands. He signed over the money to Pakistan's new high commissioner in London (who rejoiced in the name of Rahimatoola). Appalled, and under pressure from India, the Nizam cabled Westminster Bank and told officials to freeze the account. Soon afterwards, in September 1948, Indian troops marched into Hyderabad and brutally annexed his kingdom.
The story would be little more than one of the curious tales from the partition of India - were it not for the fact that, 53 years later, the money is still stuck in a NatWest account in Britain. And as of last week, depending on whom you talk to, the Nizam's missing fortune has grown to between £25m and £80m.
The fact that it is still there is an intriguing saga. It says much about the frozen state of subcontinental politics, the giddy decline of India's royal houses in the years after independence, and modern banking practices. The Indian government has just announced that it is making fresh efforts to retrieve the cash. But it is up against a sea of rival claimants - Pakistan's military rulers, the Nizam's eldest grandson, and a mysterious woman called Princess Tahera, who last month told an Indian court that £5m of the fortune belonged to her.
"Of course he needs the money. He needs it very badly," Sadruddin Javeri, a long-time friend of the Nizam's grandson, Mukarram Jah, says. "He is in debt. He lives in a small apartment in Istanbul. It is a pitiable situation. The man's grandfather signed an agreement with the British government and now the British government is ignoring him."
Before his death in 1970, the dethroned seventh Nizam's son made attempts to get the money back. In 1957, after several rounds of litigation between the Nizam and the Pakistani government, the case reached the House of Lords. Lord Denning concluded that the account could only be unfrozen with the agreement of all the parties. The only way forward was "intergovernmental negotiations", he averred. Few people then, however, would have imagined that the bitter adolescent rivalry that characterised the early years of India and Pakistan's relationship would continue well into the next century.
The current legal imbroglio, meanwhile, has been made worse by the late Nizam's lascivious past. The Nizam, Mir Osman Ali Khan, had taken care to provide for the women of his court. He made generous settlements with each of them. But by the 1990s the number of the Nizam's illegitimate dependants had risen to almost 400 - all of whom, it transpired, wanted a share of the cake. "If there was a DNA test, I'm not sure they would all pass. That's my opinion," one embittered family source says. The dependants' principal target was Prince Mukarram Jah, the Nizam's eldest grandson, and heir. Now 66, Jah - a rather stooped, balding figure with a drooping, walrus-like grey moustache - had inherited much of the Nizam's fortune. It included land, palaces, jewellery and a rusting collection of antique cars. But over the disastrous course of five marriages, and a series of business ventures, he squandered most of his ancestors' carefully accumulated assets. In 1996 the Taj hotel group wrested control of two of his palaces in Hyderabad in lieu of unpaid debts. With creditors pressing from all sides, the present Nizam also sold off his farmhouse and properties in Australia, where he lived for many years.
Friends say the Indian government has treated the Nizam shabbily. But they admit he has profligate habits. "The divorces have cost him a lot of money," Javeri says. "He has still got several palaces. He is asset rich but cash poor. He has never defrauded anybody, and if he wants to live like a Nizam, then why not?" Mukarram Jah was now so poor, in fact, he was unable to hire a lawyer to negotiate with NatWest over his father's missing millions.
In March of this year, meanwhile, another mysterious character walked into this slow-moving historical drama - an Indian woman known as Princess Tahera. Princess Tahera told the high court in Andhra Pradesh, the modern Indian state that replaced the Nizam's sprawling kingdom, that she was entitled to £5m from the NatWest account. The money was owed to her as mehr - the sum a Muslim woman brings with her to her husband's family during marriage. The money is traditionally returned in the event of divorce. Princess Tahera told the court she had been married to Mukarram Jah, and named him, NatWest, and India's external affairs ministry in her suit. Though Jah has had many wives - he currently lives with his fifth, Princess Orchedi, in Turkey - according to him, Princess Tahera is not one of them. "I have known the Nizam for 30 years and he has never met this woman," Javeri insists.
The main beneficiary of this surreal dispute, of course, is NatWest, now part of the Royal Bank of Scotland group. The late Nizam's money was initially invested in war bonds, earning interest at 3%. In the 1960s the money was shifted into a fixed-rate deposit account. Over time most of the partners who had dealt with the account retired. Eventually, they died. When I inquire whether the bank ever intends to give the money back, only one, very senior NatWest figure can be found who can confirm that the account still exists. My suggestion that it could be in NatWest's interest to string out the affair for another 50 years is met with anguished denial. "That's absolute rubbish," NatWest spokeswoman Erica Harper says. "We don't release funds unless there is an agreement from the parties in dispute. The sum in the account is irrelevant. We are obliged to act in the same way if the sum is two pence or £200m," she adds. Until India and Pakistan and the Nizam agree, then, to cut a deal, it seems the money will remain lodged interminably inside NatWest's shiny London HQ at Bishopsgate EC2.
Not, though, that the Indian government isn't trying. Last week, India's home affairs minister, ID Swami, told the Rajya Sabha, India's upper house, that the Nizam's original deposit of £1,007,940 and nine shillings had grown to £25,454,350 and 18 pence. The government was continuing its efforts to resolve the problem, he added. Solipeta Reddy, one of Hyderabad's MPs, says the money doesn't belong to Mukarram Jah but to the people of his constituency. "We want the money back in India. It belongs to the Indian government," he declares. "The money should go to the people of Hyderabad state." Why, then, had it taken so long to sort the dispute out? "The government has been a little inactive," Reddy concedes.
In other areas, though, Indian officials have been zealous. In the 1970s the Nizam's trustees agreed to sell the famous jewellery collection to the Indian state in lieu of tax. Fifteen years later India's Supreme Court finally fixed a price - of £43m, far less than the £230m the family believed the jewels to be worth. Mukarram Jah's share was £13m - but he never got the money. The Nizam's illegitimate dependants filed a series of legal suits. They claimed he was not capable of looking after such large sums, and the case disappeared down the black hole of India's imponderable legal system.
Mukarram Jah's younger brother, Mufakkam Jah, meanwhile, has also been a party to litigation. He is said to be pursuing his own claim to the NatWest millions. He, at least, lives in Bayswater, central London, and could therefore easily pop into NatWest's City office to check up on the frozen account, should the whim seize him. Both brothers, it seems, have hired the same international law firm, Allen & Overy, to represent their interests. They could be in for a long wait. "The Nizam has never been into the branch holding the account," Javeri says. Why not, I wonder? "He has given up hope. He has given up hope that he will ever see his money," he replies.
In 1948, an Indian maharajah deposited £1m - in those days, a staggeringly large sum - with the Westminster Bank in London. The Nizam of Hyderabad, as he was known, cut a curious figure. A frail, tiny man, and a devout Muslim, he was notorious for his meanness - he wore the same tattered fez for 35 years, dressed in rumpled cotton pyjamas, and ate all his meals off a tin plate, while sitting on a mat in his bedroom surrounded by overflowing wastepaper baskets. But he was also, back then, the richest man on the planet.
In his palace gardens in India, trucks loaded with gold ingots lay rusting. His jewellery collection was said to be so large that the pearls alone would cover all the pavements of Piccadilly Circus. The collection included the legendary Jacobi diamond, a 185-carat gem the size of a lime, and heavier even than the Kohinoor - and the Nizam used this diamond, wrapped in old newspaper, as a paperweight.
The Nazim's family had ruled Hyderabad since the early 18th century, and he was the only maharajah in British India who enjoyed the title Exalted Highness - a reward for his generous £25m contribution to the British exchequer during the first world war. His austere appearance also masked his prodigious appetite for sex. By placing hidden cameras in the walls and ceilings of his guest quarters, he had managed to assemble India's largest collection of pornographic pictures, and in his lifetime he impregnated at least 86 of the mistresses who resided in his busy harem. According to family sources he sired more than 100 illegitimate children.
When the Nizam deposited this £1m in London, he was in a tricky political situation. As the Muslim ruler of an Indian territory the size of England and Scotland, he was attracted by the idea of joining the new state of Pakistan. But there were several obstacles. Most of his 20m subjects were Hindus. And his huge landlocked kingdom was thousands of miles away from the new Muslim homeland over in the Punjab.
While the Nizam dithered, the man to whom he had entrusted the £1m, his finance minister Moin Nawaz Jung, took matters into his own hands. He signed over the money to Pakistan's new high commissioner in London (who rejoiced in the name of Rahimatoola). Appalled, and under pressure from India, the Nizam cabled Westminster Bank and told officials to freeze the account. Soon afterwards, in September 1948, Indian troops marched into Hyderabad and brutally annexed his kingdom.
The story would be little more than one of the curious tales from the partition of India - were it not for the fact that, 53 years later, the money is still stuck in a NatWest account in Britain. And as of last week, depending on whom you talk to, the Nizam's missing fortune has grown to between £25m and £80m.
The fact that it is still there is an intriguing saga. It says much about the frozen state of subcontinental politics, the giddy decline of India's royal houses in the years after independence, and modern banking practices. The Indian government has just announced that it is making fresh efforts to retrieve the cash. But it is up against a sea of rival claimants - Pakistan's military rulers, the Nizam's eldest grandson, and a mysterious woman called Princess Tahera, who last month told an Indian court that £5m of the fortune belonged to her.
"Of course he needs the money. He needs it very badly," Sadruddin Javeri, a long-time friend of the Nizam's grandson, Mukarram Jah, says. "He is in debt. He lives in a small apartment in Istanbul. It is a pitiable situation. The man's grandfather signed an agreement with the British government and now the British government is ignoring him."
Before his death in 1970, the dethroned seventh Nizam's son made attempts to get the money back. In 1957, after several rounds of litigation between the Nizam and the Pakistani government, the case reached the House of Lords. Lord Denning concluded that the account could only be unfrozen with the agreement of all the parties. The only way forward was "intergovernmental negotiations", he averred. Few people then, however, would have imagined that the bitter adolescent rivalry that characterised the early years of India and Pakistan's relationship would continue well into the next century.
The current legal imbroglio, meanwhile, has been made worse by the late Nizam's lascivious past. The Nizam, Mir Osman Ali Khan, had taken care to provide for the women of his court. He made generous settlements with each of them. But by the 1990s the number of the Nizam's illegitimate dependants had risen to almost 400 - all of whom, it transpired, wanted a share of the cake. "If there was a DNA test, I'm not sure they would all pass. That's my opinion," one embittered family source says. The dependants' principal target was Prince Mukarram Jah, the Nizam's eldest grandson, and heir. Now 66, Jah - a rather stooped, balding figure with a drooping, walrus-like grey moustache - had inherited much of the Nizam's fortune. It included land, palaces, jewellery and a rusting collection of antique cars. But over the disastrous course of five marriages, and a series of business ventures, he squandered most of his ancestors' carefully accumulated assets. In 1996 the Taj hotel group wrested control of two of his palaces in Hyderabad in lieu of unpaid debts. With creditors pressing from all sides, the present Nizam also sold off his farmhouse and properties in Australia, where he lived for many years.
Friends say the Indian government has treated the Nizam shabbily. But they admit he has profligate habits. "The divorces have cost him a lot of money," Javeri says. "He has still got several palaces. He is asset rich but cash poor. He has never defrauded anybody, and if he wants to live like a Nizam, then why not?" Mukarram Jah was now so poor, in fact, he was unable to hire a lawyer to negotiate with NatWest over his father's missing millions.
In March of this year, meanwhile, another mysterious character walked into this slow-moving historical drama - an Indian woman known as Princess Tahera. Princess Tahera told the high court in Andhra Pradesh, the modern Indian state that replaced the Nizam's sprawling kingdom, that she was entitled to £5m from the NatWest account. The money was owed to her as mehr - the sum a Muslim woman brings with her to her husband's family during marriage. The money is traditionally returned in the event of divorce. Princess Tahera told the court she had been married to Mukarram Jah, and named him, NatWest, and India's external affairs ministry in her suit. Though Jah has had many wives - he currently lives with his fifth, Princess Orchedi, in Turkey - according to him, Princess Tahera is not one of them. "I have known the Nizam for 30 years and he has never met this woman," Javeri insists.
The main beneficiary of this surreal dispute, of course, is NatWest, now part of the Royal Bank of Scotland group. The late Nizam's money was initially invested in war bonds, earning interest at 3%. In the 1960s the money was shifted into a fixed-rate deposit account. Over time most of the partners who had dealt with the account retired. Eventually, they died. When I inquire whether the bank ever intends to give the money back, only one, very senior NatWest figure can be found who can confirm that the account still exists. My suggestion that it could be in NatWest's interest to string out the affair for another 50 years is met with anguished denial. "That's absolute rubbish," NatWest spokeswoman Erica Harper says. "We don't release funds unless there is an agreement from the parties in dispute. The sum in the account is irrelevant. We are obliged to act in the same way if the sum is two pence or £200m," she adds. Until India and Pakistan and the Nizam agree, then, to cut a deal, it seems the money will remain lodged interminably inside NatWest's shiny London HQ at Bishopsgate EC2.
Not, though, that the Indian government isn't trying. Last week, India's home affairs minister, ID Swami, told the Rajya Sabha, India's upper house, that the Nizam's original deposit of £1,007,940 and nine shillings had grown to £25,454,350 and 18 pence. The government was continuing its efforts to resolve the problem, he added. Solipeta Reddy, one of Hyderabad's MPs, says the money doesn't belong to Mukarram Jah but to the people of his constituency. "We want the money back in India. It belongs to the Indian government," he declares. "The money should go to the people of Hyderabad state." Why, then, had it taken so long to sort the dispute out? "The government has been a little inactive," Reddy concedes.
In other areas, though, Indian officials have been zealous. In the 1970s the Nizam's trustees agreed to sell the famous jewellery collection to the Indian state in lieu of tax. Fifteen years later India's Supreme Court finally fixed a price - of £43m, far less than the £230m the family believed the jewels to be worth. Mukarram Jah's share was £13m - but he never got the money. The Nizam's illegitimate dependants filed a series of legal suits. They claimed he was not capable of looking after such large sums, and the case disappeared down the black hole of India's imponderable legal system.
Mukarram Jah's younger brother, Mufakkam Jah, meanwhile, has also been a party to litigation. He is said to be pursuing his own claim to the NatWest millions. He, at least, lives in Bayswater, central London, and could therefore easily pop into NatWest's City office to check up on the frozen account, should the whim seize him. Both brothers, it seems, have hired the same international law firm, Allen & Overy, to represent their interests. They could be in for a long wait. "The Nizam has never been into the branch holding the account," Javeri says. Why not, I wonder? "He has given up hope. He has given up hope that he will ever see his money," he replies.
