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Africa’s Internet riches plundered by China broker, AP investigation finds

Millions of Internet addresses have been waylaid, some fraudulently, in part by insider machinations linked to a former top employee of the nonprofit that assigns Africa’s Internet addresses.

Two young boys use a computer at an Internet cafe in the low-income Kibera neighborhood of Nairobi, Kenya.
Two young boys use a computer at an Internet cafe in the low-income Kibera neighborhood of Nairobi, Kenya.
Brian Inganga / AP

KAMPALA, Uganda — Outsiders have long profited from Africa’s riches of gold, diamonds and even people. Digital resources have proven no different.

Millions of Internet addresses assigned to Africa have been waylaid, some fraudulently, in part through insider machinations linked to a former top employee of AFRINIC, the nonprofit that assigns the continent’s online addresses, an Associated Press investigation has found.

Many have benefited spammers and scammers. Others are being used to serve Chinese appetites for pornography and gambling.

The nonprofit’s new leadership is working to reclaim the lost addresses. But a legal challenge by a deep-pocketed Chinese businessman is threatening the nonprofit’s very existence.

The businessman is Lu Heng, a Hong Kong arbitrage specialist. He obtained 6.2 million African Internet addresses from 2013 to 2016. That’s about 5% of the continent’s total — more than Kenya has.

The Internet service providers and others to whom AFRINIC assigns IP address blocks aren’t buying them. Instead, they pay membership fees to cover administrative costs, which are intentionally kept low.

That left lots of room, though, for graft.

When AFRINIC revoked Lu’s addresses, now worth about $150 million, he fought back. In late July, his lawyers persuaded a judge in Mauritius, where AFRICNIC is based, to freeze its bank accounts. His company also filed a $80 million defamation claim against AFRINIC and its new CEO.

The turmoil comes as a shock to the global networking community, which has long considered the Internet as technological scaffolding to help advance society. Some worry it could undermine the entire numerical address system that makes the Internet work.

“There was never really any thought, particularly in the AFRINIC region, that someone would just directly attack a foundational element of Internet governance and just try and shut it down, try and make it go away.” said Bill Woodcock, executive director of Packet Clearing House, a global nonprofit that has helped build out Africa’s Internet.

Lu said he’s an honest businessman who broke no rules in obtaining the African address blocks. And, rejecting the consensus of the Internet’s stewards, he said its five regional registries have no business deciding where Internet Protocol addresses are used.

“AFRINIC is supposed to serve the Internet,” Lu said. “It’s not supposed to serve Africa. They’re just bookkeepers.”

In revoking Lu’s address blocks, AFRINIC is trying to reclaim Internet real estate critical for a continent that lags the rest in leveraging online resources to raise living standards and boost health and education. Africa has been allocated just 3% of the world’s first-generation IP addresses.

Making things worse: the alleged theft of millions of AFRINIC IP addresses, involving the organization’s former No. 2 official, Ernest Byaruhanga, who was fired in December 2019.

The building housing the headquarters of AFRINIC, the nonprofit organization responsible for allocating Africa’s IP address space,near Port Louis, Mauritius.
The building housing the headquarters of AFRINIC, the nonprofit organization responsible for allocating Africa’s IP address space,near Port Louis, Mauritius.
L’express Maurice / AP

The registry’s new CEO, Eddy Kayihura, said at the time that he’d filed a criminal complaint with the Mauritius police. He shook up management and began trying to reclaim wayward IP address blocks.

Lu’s legal gains in the case have stunned and dismayed the global Internet governance community. Network activists worry, for starters, that they could help facilitate further Internet resource grabs by China. Some of Lu’s major clients include the Chinese state-owned telecommunication firms China Telecom and China Mobile.

“I expect that he has got quite a significant backing that’s actually pulling the strings,” said Mark Tinka, a Ugandan who heads engineering at SEACOM, a South Africa Internet backbone and services provider.

Lu said accusations that he’s working for the Chinese government are “wild” conspiracy theories.

While billions use the Internet daily, its inner workings are little understood and rarely subject to scrutiny. Globally, five fully autonomous regional bodies, operating as nonprofit public trusts, decide who owns and runs the Internet’s limited store of first-generation IP address blocks. Founded in 2003, AFRINIC was the last of the five registries created.

Just shy of a decade ago, the pool of 3.7 billion first-generation IP addresses, known as IPv4, was fully exhausted in the developed world. Such IP addresses now sell at auction $20 to $30 each.

The current crisis was precipitated by the uncovering of the alleged fraud at AFRINIC. The misappropriation of four million IP addresses worth more than $50 million by Byahuranga and perhaps others was discovered by Ron Guilmette, a freelance Internet sleuth in California, and  exposed by him and journalist Jan Vermeulen of the South African tech website MyBroadband.

Ownership of at least 675,000 wayward addresses is still in dispute. Some are controlled by an Israeli businessman who has sued AFRINIC for trying to reclaim them.

Someone had tampered with AFRINIC’s WHOIS database records — which are like deeds for IP addresses — to steal so-called legacy address blocks, Guilmette said.

Many of the misappropriated address blocks were unused IP space stolen from businesses and are being used to host websites that have nonsense URL address names and contain gambling and pornography aimed at an audience in China, whose government bans such online businesses.