On 12 September 1869, she ran aground on Sha`b Abu Nuhas coral reef near Shadwan Island in the mouth of the Gulf of Suez, in the Red Sea. Having assessed the ship to be safe and the pumps, Captain P. B. Jones denied repeated passengers requests to abandon ship, and reassured them that the ship was safe and that the P&O Liner Sumatra was due to pass by and would rescue them. There was a general air of calm and normality on board until eventually at 2 a.m. on the 14th, the rising water engulfed the ships boilers and the ship was left without power or light. At 11 a.m. the following morning, after 34 hours on the reef, Captain Jones had just given the order to abandon ship and the first four passengers had taken their seats in one of the lifeboats when Carnatic suddenly broke in half. 31 people drowned. The survivors made it to barren Shadwan, where they were rescued the next day by a passing ship, Sumatra.
Onboard Carnatic was £40,000 worth of gold (well in excess of £1,000,000 in modern terms), so the wreck was the subject of a salvage operation two weeks later. All the gold was reported recovered, but persistent rumours of remaining treasure has added to the romance of the ship.
Captain Jones was recalled to England to face an official Board of Enquiry, which labelled Jones as “a skilful and experienced officer.” However, they also found “it appears there was every condition as regards ship, weather and light to ensure a safe voyage and there was needed only proper care. This was not done, and hence the disaster.” Although Jones’ Master’s certificate was suspended for only nine months, he never returned to sea.
Rediscovered in May 1984, the wreck of the Carnatic is now a popular scuba diving site.