In November, 1768, the Court of Directors in London, with the approval of Her Majesty's Ministers, who promised to afford protection to the new Colony, issued orders to the authorities at Bombay for the establishment of a settlement at Balambangan with the intention of diverting to it the China trade, of drawing to it the produce of the adjoining countries, and of opening a port for the introduction of spices, etc. by the Bugis, and for the sale of Indian commodities. The actual date of the foundation of the settlement is not known, but Mr. F. C. DANVERS states that in 1771 the Court ordered that the Government should be vested in "a chief and two other persons of Council," and that the earliest proceedings extant are dated Sulu, 1773, and relate to a broil in the streets between Mr. ALCOCK, the second in the Council, and the Surgeon of the _Britannia_. This was a somewhat unpropitious commencement, and in 1774 the Court are found writing to Madras, to which Balambangan was subordinate, complaining of the "imprudent management and profuse conduct" of the Chief and Council. In February, 1775, Sulu pirates surprised the stockade, and drove out the settlers, capturing booty valued at about a million dollars. The Company's officials then proceeded to the island of Labuan, now a British Crown Colony, and established a factory, which was maintained but for a short time, at Brunai itself. In 1803 Balambangan was again occupied, but as no commercial advantage accrued, it was abandoned in the following year, and so ended all attempts on the part of the East India Company to establish a Colony in Borneo. While at Balambangan, the officers, in 1774, entered into negotiations with the Sultan of Brunai, and on undertaking to protect him against Sulu and Mindanau pirates, acquired the exclusive trade in all the pepper grown in his country.