This crisis was started by a group of politicians who were dissatisfied towards Stephen Kalong Ningkan's leadership as chief minister.
It was widely believed that the ouster of Ningkan was a result of interference by the Malaysian federal government due to him being a strong advocate of greater state autonomy.
Temenggung Jugah (leader of the PESAKA party) was originally poised to become the first governor of Sarawak however he was transferred to a newly created portfolio called "Federal Minister of Sarawak Affairs" because of the opposition from the Malaysian federal government against the Dayaks to fill up the two highest posts in the state.
Ningkan did not include any of the PESAKA representatives in his state cabinet despite the party contributing a significant number of seats for the Alliance.
[3] On 13 June 1966, Ningkan sacked Abdul Taib Mahmud (a BARJASA leader) from the post of Minister of Communication and Works for the second time.
[5] On the same day, the Governor, Abang Haji Openg, at the insistence of the federal government in Kuala Lumpur,[8] requested Ningkan to resign from the post.
Ningkan argued that the letter has not been supported by a formal motion of no confidence against him at the Council Negri (now Sarawak State Legislative Assembly).
[7] Ningkan also claimed that he still commanded a majority of the state assembly members and challenged his dissidents into a formal debate of motion of no confidence in the Council Negeri.
According to Section 21 of the Interpretation Ordinance of the Sarawak state constitution, only the Council Negri has the power to appoint or dismiss a chief minister.
[13] Ningkan also argued that the Sarawak constitutional amendment was illegal because the state of emergency was declared under unusual circumstances.
On 1 December 1967, federal court of Malaya determined that Yang di-Pertuan Agong has the absolute power to decide on the declaration of emergency, the parliament of Malaysia has the power to amend the constitution of Sarawak based on Article 150 of the federal constitution without consulting the governor of Sarawak.