North Borneo was granted
its Independence on 31 August 1963(1). Sixteen days later it formed
Malaysia with Sarawak, Singapore and the Federation of Malaya i.e. on
16 September 1963.
Donald Stephens, Tun Fuad
as he was known then, was appointed Sabah's first Chief Minister
while Datu Mustapha was appointed her first Head of State. Datu
Mustapha had expected that as Head of State, he would retain many
functions previously in the purview of the all powerful Governor.
When he realized that contrary to his expectations, it was the Chief
Minister who wielded power, he became frustrated and refused to
co-operate with Stephens. It got so bad that the government was
unable to efficiently go about conducting the business of governing.
The Prime Minister, Tunku Abdul Rahman, mediated and the solution was
for Stephens to step down. Stephens stepped down on 31 December 1964
and took up the position of federal minister for Sabah Affairs and
Civil Defense. Replacing him as Chief Minister was Peter Lo who
previously held the position as Federal Minister without
portfolio.(2)