“Lease Payment... Or 'Extortion'?!!” - "Wealthy" Penang Under Attack Again From "Envious" Kedah...?!!

Opinion | “Lease Payment... Or 'Extortion'?!!” - "Wealthy" Penang Under Attack Again From "Envious" Kedah...?!!


15 Nov 2025 • 4:00 PM MYT


JK Joseph
Repentant ex-banker who believes in truth, compassion and some humour

Credit Image: The Vibes (File pic) / BH Online (Foto: BERNAMA)


The Kedah government under PAS seemed to have reignited a fresh controversy in the country after allegedly threatening to initiate legal proceedings to review and determine Penang's true territorial status!


For the record, the matter had “blown up” again recently after the state's maverick Menteri Besar Muhammad Sanusi had announced that his administration was in the final stages of appointing a legal team to pursue court action on the long-debated “lease” conundrum.


Sanusi had also stated that Kedah ruler, Sultan Sallehuddin Sultan Badlishah, had emphasised the need for transparency in clarifying matters related to the historical lease arrangement.


Meanwhile, Penang Chief Minister Chow Kon Yeow in responding to the “threats” had stressed that the long-standing territorial dispute raised by Kedah is best settled through legal channels and that he was ready to see the Kedah leader in court.


Laying the groundwork for a future annexation?

The issue was actually a “hot topic” last year after Sanusi had told the Kedah State Assembly that Penang was rightfully part of Kedah and that the state could “take it back!”


However, a senior Penang executive councillor Wong Hon Wai had earlier this week cautioned that Penang's sovereignty is fully protected under the Federal Constitution and enforced since 1957; he further pointed out that under Article 1 (2) of the Federal Constitution, it is listed as one of the 13 states with equal rights as others – thus, its position is secured as a member of the Federation.


So is Sanusi effectively challenging the Federal Constitution in openly disputing the sovereignty of another state?


For context, even back in 2021, Professor Datuk Ahmad Murad Merican from the International Islamic University Malaysia had reaffirmed that there were no lease documents or royalty payment agreements between Penang and Kedah in 1786.


In fact, at that time, the then-deputy chief minister of Penang Prof P Ramasamy had also lambasted the Kedah Menteri Besar for demanding RM100 million a year as “lease payment” from the federal government to honour a so-called colonial-era agreement.


Moreover, according to the former Perai assemblyman there was “no single clear historical document” that would attest that Kedah had leased Penang to the British.


So it would appear that the Kedah government’s claims do not seem to be based on actual verified documents but rather on opaque unwritten historical accounts.


What if Thailand starts to press claims that Langkawi and Kedah must be returned to it - as they used to belong to the old Siam kingdom?


Interestingly, what many may not be aware of is that according to documented history Kedah had no territorial right over the island at the time when it allegedly agreed to the “lease” because it was Thailand - then known as Siam - that had sovereignty over the northern state.


Furthermore, it has also been reported that in Thai history textbooks its former territory Kedah is officially known as Saiburi, while Penang island is known as Koh Mak.

Credit Image: Mosses PA Ampang (Facebook)


But what is even more intriguing is that, in 1826, King Rama III and British officials had signed the “Burney Treaty” where Kedah, Perlis, Terengganu and Pattani became Siamese provinces while Penang and Province Wellesley became British territories; technically, this treaty alone would have superseded any earlier “leasing” agreement between Kedah and the East India Company in 1786!


If not for the British, could Kedah still be under Thai control…?


In truth, it was only as recent as 1909 that the Siamese kingdom had actually returned Kedah togeher with the other three northern Malay states to the British; doesn't that effectively imply that if not for the much-despised colonialists wouldn't the state still be a territory of Thailand - and Malaysians will need to present their international passports if they wished to enter the state?


In conclusion, taking into account all the established historical facts, what solid grounds could the hardline Islamist Kedah government possibly have to claim that Penang belongs to them - and worse still, demand a preposterous “lease” payment of RM100mil? If anything, doesn't the whole dubious episode reek of bullying – as well as being seditious in nature?

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Fei-Lo has no decent policy for progressing Kedah, hence has to desperately resort to distractions of such a nature