African Internet Riches Threatened by Lawsuit and Corruption

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, including through insider machinations linked to a former top employee of the nonprofit that assigns the continent’s addresses. Instead of serving Africa’s internet development, many have benefited spammers and scammers, while others satiate Chinese appetites for pornography and gambling.

New leadership at the nonprofit, AFRINIC, is working to reclaim the lost addresses. But a legal challenge by a deep-pocketed Chinese businessman is threatening the body’s very existence.

The businessman is Lu Heng, a Hong Kong-based arbitrage specialist. Under contested circumstances, he obtained 6.2 million African 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 purchasing them. They pay membership fees to cover administrative costs that are intentionally kept low. That left lots of room, though, for graft.

AFRINIC made no claim of graft when it revoked Lu’s addresses, now worth about $150 million, saying his company was not adequately serving Africa’s interests. Lu fought back. His lawyers in late July 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.