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Decades-old attempts to exclude Penang from Federation resurface amid compensation debate
Penang Umno veteran reveals historical bids to remove the state’s from the Federation of Malaya prior to Independence in 1957, providing context to the current dispute over federal payments to Kedah
Updated 14 minutes ago · Published on 04 Dec 2025 8:47AM
Claims now challenged by the state’s ruling party - December 4, 2025
by Ian McIntyre
HISTORICAL attempts to exclude Penang from the Federation of Malaya have resurfaced in public debate, with a veteran politician emphasising the island’s long-established place in the Federation ahead of Independence, as Kedah seeks higher federal compensation.
Tan Sri Mohd Yussof Latiff, 95, a Penang Umno veteran and current head of the Penang Malays Association (Pemenang), recalled in a recent interview that some 60 years ago, two private organisations submitted applications to the then Queen of England, relayed to Malaysian founding father Tunku Abdul Rahman, proposing that Penang be left out of the negotiations for national Independence in 1957.
The first request came from the colonial-influenced Penang International Chamber of Commerce, which argued that Penang should stand apart from the Independence drive to safeguard business vitality and economic ties to the British Crown.
The proposal was denied by the independence negotiators.
A second bid was made by the Penang Straits Chinese Settlement Association, which made a similar request to separate Penang from the Federation. This was outright rejected by both the Queen and Tunku Abdul Rahman, Yussof revealed.
Following these attempts, Penang Umno convened an emergency meeting to consider surrendering the island back to Kedah. At the time, Yussof served as state Umno secretary before becoming political secretary to the late second Chief Minister, Tun Dr Lim Chong Eu.
“All of this came to pass when Tunku Abdul Rahman and the colonial authorities decided that Penang would indeed be part of Malaya and squashed any attempts of secession.
“There was no need to bring Kedah into the picture since Penang was, after all, going to be part of the Federated states,” Yussof said. “We need to know our history.”
The issue has gained renewed attention following remarks by Kedah Chief Minister Datuk Seri Muhammad Sanusi Md Nor, who insists that Penang historically belonged to Kedah and that the federal government should increase the annual compensation from RM10 million to RM100 million, a matter he intends to pursue in court.
Sanusi’s argument draws on historical documents and elder testimonies, suggesting that in 1786, the Kedah Sultan, Almarhum Sultan Abdullah Mukarram Shah, was “deceived” into leasing Penang to Francis Light of the British East India Company in exchange for military protection against Siamese raiders—a promise that was ultimately unfulfilled.
“The surrender came in the form of a lease agreement to Light and his forces in exchange for protection against the marauding Siamese raiders. But when the Siamese did attack Kedah, the British did not come to the aid of the Sultan,” Yussof explained, highlighting what he described as a historic betrayal.
Sanusi’s legal challenge builds on this historical context, seeking a higher federal payout, which was increased to RM10 million under Tun Dr Mahathir Mohamed’s administration, up from the original RM10,000 agreed under British rule.
The claims have prompted a strong rebuttal from Penang’s ruling DAP. Deputy Chief Minister II Jagdeep Singh Deo stressed that Penang is recognised as a sovereign state within Malaysia under the Federal Constitution. “The constitution is the supreme law of the land and it must be respected,” he said.
Yussof’s account underscores that political stability and careful negotiation during the lead-up to Independence were crucial in preserving Penang’s status, countering present-day disputes and reaffirming the island’s place within the Federation of Malaysia. - December 4, 2025
by Ian McIntyre
HISTORICAL attempts to exclude Penang from the Federation of Malaya have resurfaced in public debate, with a veteran politician emphasising the island’s long-established place in the Federation ahead of Independence, as Kedah seeks higher federal compensation.
Tan Sri Mohd Yussof Latiff, 95, a Penang Umno veteran and current head of the Penang Malays Association (Pemenang), recalled in a recent interview that some 60 years ago, two private organisations submitted applications to the then Queen of England, relayed to Malaysian founding father Tunku Abdul Rahman, proposing that Penang be left out of the negotiations for national Independence in 1957.
The first request came from the colonial-influenced Penang International Chamber of Commerce, which argued that Penang should stand apart from the Independence drive to safeguard business vitality and economic ties to the British Crown.
The proposal was denied by the independence negotiators.
A second bid was made by the Penang Straits Chinese Settlement Association, which made a similar request to separate Penang from the Federation. This was outright rejected by both the Queen and Tunku Abdul Rahman, Yussof revealed.
Following these attempts, Penang Umno convened an emergency meeting to consider surrendering the island back to Kedah. At the time, Yussof served as state Umno secretary before becoming political secretary to the late second Chief Minister, Tun Dr Lim Chong Eu.
“All of this came to pass when Tunku Abdul Rahman and the colonial authorities decided that Penang would indeed be part of Malaya and squashed any attempts of secession.
“There was no need to bring Kedah into the picture since Penang was, after all, going to be part of the Federated states,” Yussof said. “We need to know our history.”
The issue has gained renewed attention following remarks by Kedah Chief Minister Datuk Seri Muhammad Sanusi Md Nor, who insists that Penang historically belonged to Kedah and that the federal government should increase the annual compensation from RM10 million to RM100 million, a matter he intends to pursue in court.
Sanusi’s argument draws on historical documents and elder testimonies, suggesting that in 1786, the Kedah Sultan, Almarhum Sultan Abdullah Mukarram Shah, was “deceived” into leasing Penang to Francis Light of the British East India Company in exchange for military protection against Siamese raiders—a promise that was ultimately unfulfilled.
“The surrender came in the form of a lease agreement to Light and his forces in exchange for protection against the marauding Siamese raiders. But when the Siamese did attack Kedah, the British did not come to the aid of the Sultan,” Yussof explained, highlighting what he described as a historic betrayal.
Sanusi’s legal challenge builds on this historical context, seeking a higher federal payout, which was increased to RM10 million under Tun Dr Mahathir Mohamed’s administration, up from the original RM10,000 agreed under British rule.
The claims have prompted a strong rebuttal from Penang’s ruling DAP. Deputy Chief Minister II Jagdeep Singh Deo stressed that Penang is recognised as a sovereign state within Malaysia under the Federal Constitution. “The constitution is the supreme law of the land and it must be respected,” he said.
Yussof’s account underscores that political stability and careful negotiation during the lead-up to Independence were crucial in preserving Penang’s status, countering present-day disputes and reaffirming the island’s place within the Federation of Malaysia. - December 4, 2025
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