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 A diamond and two golden hearts: How the 

Jubilee once saved Tata Steel from bankruptcy 

         


It is not uncommon for promoters of a company to pledge their shares in order to raise funds during stressful

circumstances. But have you heard of a chairman's wife pledging her personal jewellery so that her husband can 

pay salaries on time? Had it not been for the large heartedness of Sir Dorabji Tata's wife Lady Meherbai, who

 agreed to pledge all her jewellery including the precious Jubilee Diamond, Tata Steel might have collapsed way

 back in 1924, reveals a new book.After Dorabji, the elder son of Tata group founder Jamsetji Tata, succeeded his

 father as the chairman of the group,  Tata Steel, which was still in its early years, ran into a host of difficulties, ranging from price inflation to labour issues. By 1923, the company faced a shortage of cash. The Tatas made valiant efforts to raise funds and get past the 

liquidity problem."In 1924, a telegram arrived from Jamshedpur bearing ill news. It simply said that there was not 

enough moneyleft to pay wages to the employees of Tata Steel,” writes Harish Bhat, brand custodian at Tata Sons, in his book 

'TataStories'. “Would the fledgling company survive or would it be forced to shut down? Would the dreams and 

visions that guided the establishment of India's first integrated steel plant come tumbling down?”

At this point, Dorabji and his wife Meherbai decided to pledge their entire personal wealth, along with the diamond,

 so that the company could survive the downcycle. Imperial Bank provided the Tatas with a loan of Rs 1 crore against their

personal pledge.

"Soon, the company's expanded production facilities began delivering returns. The situation started to take a turn 

e better. Not a single worker was retrenched during the period of intense struggle but shareholders were not paid 

dividends for the next several years. The company returned to profitability within a few years and the pledge was 

repaid. By the late 1930s, Tata Steel began to prosper again," says the book.

 The Jubilee diamond, which played a key role in saving Tata Steel from collapsing, was no ordinary one. Mined in South Africa, the 

magnificent stone was the sixth largest in the world and twice as large as the legendary Kohinoor. Often described as the most perfectly

 cut of all large diamonds, it was named as the Jubilee Diamond in 1897 to commemorate the diamond jubilee of Queen 

Victoria. Dorabji had bought the diamond from London merchants for around 1 lakh pounds as a gift for his lady love. After

 the death  of the couple, the diamond was sold to raise funds for Sir Dorabji Tata Charitable Trust. The trust used those

 funds to establish the Tata Memorial Hospital and other institutions."Indeed, this makes the Jubilee Diamond unique -

it is perhaps the only diamond in the history of mankind that has saved a steel company from collapse, 

protecting many livelihoods, and has then gone on to birth a cancer hospital as well. No diamond has served 

worthier causes, and this was only possible because of two wonderful hearts of gold,


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