on Gaya Island. The settlement however was burnt down during a raid by a local leader named Mat Salleh and was never re-established. Due to such resistance, establishing law and order as well as recruiting Sikh policemen from northern India became one of the company's earlies priorities, along with expanding trade; instituting a government, courts, and penal system; building a railway line from Jesselton to Tenom; and encouraging the harvesting and barter trade of local crops, as well as establishment of plantations. The company also faced some resistance to its economic modernisations and tax policies. Dissolution No other state in the British Commonwealth was as devastated by the Second World War as North Borneo. By the end of the war, it was already foreseeable that the company would be unable to finance remediation for the devastation to land and infrastructure. The company therefore waived the further use of their charter and gave British North Borneo to the British Colonial Office. With the signing of an agreement on 26 June 1946, the company officially dissolved. From 15 July 1946 until the formation of Malaysia on 16 September 1963, North Borneo was a Crown colony. The agreement with the British government included a £860,000 immediate cash settlement that allowed the company to settle outstanding financial claims. The government's offer to repay all other claims by paying 2.2 million pounds had already been rejected by the company. For the negotiation of further financial compensation, the British government appointed Lord Uthwatt as an independent arbitrator. In March 1949, Uthwatt announced the result of his investigations: £1,400,000 should be awarded to the company as compensation; any claims related to war damage would not be included. The news triggered a bitter disappointment among shareholders. In just overnight, the value of the company share fell from 17s to 9s 6p. Administration With the founding of the company, the administrative divisions of North Borneo introduced by Overbeck were maintained by the establishment of the West Coast Residency and the East Coast Residency. The seat of the two residents was in Sandakan, where the governor was based. Each residency, in turn, was divided into several provinces managed by a district officer. Over time, the number of residencies increased to five: Tawau Residency (also known as East Coast Residency), Sandakan Residency, West Coast Residency, Kudat Residency, and Interior Residency. The provinces were initially named after the members of the board: