<P> In the early 18th century, ethnic Minangkabaus from Sumatra, led by Haji Muhammad Salleh (also known as Nakhoda Intan), landed on Penang Island, establishing a seaside settlement at Batu Uban in 1734 . They were followed by the Arabs, who subsequently intermarried with the Minangkabau; this gave rise to the Arab - Minangkabau admixture now described as Malay, as they have assimilated into the local Malay community . </P> <P> The history of modern Penang only began in earnest in the late 18th century . Up until then, the Sultanate of Kedah, which had control over Penang, had maintained turbulent diplomatic relations with Siam to the north . In the 1770s, the British East India Company instructed Francis Light to establish trade relations in the Malay Peninsula . Light subsequently landed in Kedah, which at that point was threatened by both Siam and Burma, as well as an internal Bugis rebellion . </P> <P> Aware of this situation, Light formed friendly relations with the then Sultan of Kedah, Sultan Muhammad Jiwa Zainal Adilin II, and promised British military protection . As part of his promises, Light assisted in the quelling of the Bugis revolt by recapturing a Bugis - held fort for the Sultan . The Sultan reciprocated by offering Penang Island to Light . Light subsequently wrote to his superiors regarding the offer, arguing that Penang Island could serve as a "convenient magazine for trade" and its strategic location would allow the British to check Dutch and French territorial gains in Southeast Asia . He also made the case that, with the other ports in the region, such as Aceh and Phuket, riddled with piracy and despotic governments, the British East India Company could seize the opportunity to establish a tranquil harbour on Penang Island conducive for free trade, noting that if "Malay, Bugis and Chinese will come to reside here, it will become the Exchange of the East if not loaded with impositions and restrictions". </P> <P> However, nothing transpired until 1786, when by that point the British were fighting the Thirteen American Colonies, which were backed by France and the Netherlands . Faced with the Dutch dominance of the East Indies (now Indonesia) and a growing French threat, Light, who by then had risen to the rank of Captain, was ordered to acquire Penang Island from Kedah . The British East India Company sought control of Penang Island as a Royal Navy base, and a trading post between China and the Indian subcontinent . </P>

Why the east india company was interested in penang/singapore