Most will take the functioning of the internet for granted. But this vast global system runs on a small list of nonprofit organisations erected during the early days before the web became dominated by the massively profitable global ventures which it now hosts.

That may soon come to an end for Africa, and if Singaporean businessman Lu Heng has his way, Asia too. Heng hopes to commercialise and commoditise the fundamental building blocks of the internet, and enable rent-seeking business models like his own to dominate what has so far been a largely voluntary and consensus-based process.

After having his access denied for violation of terms of service, Heng launched dozens of lawsuits against nonprofit AFRINIC, the African regional internet registry, who stewards the allocation of internet related resources such as IPv4 addresses.

In the Mauritian courts, Heng managed to receive two colossal rulings, one which froze AFRINIC’s accounts, and then had them placed under receivership. Mere hours after the receiver was selected, he walked into their head offices accompanied by Heng’s South African business partner Paul Wollner, announced as his “IT consultant”.

How did this foreign businessman manage to get a Mauritian judge to place the entire continent’s internet management system under control of his associates? Many details remain unobtainable, but what is clear, is that there is a distinct risk to the impartiality of internet governance for the entire continent of Africa. And if his parallel campaign against APNIC finds similar success, Asia’s will be in jeopardy too.

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A dwindling commons

Part of the problem with this story is the dry and technical nature of the problem. To grasp how bad the situation is, we must introduce ourselves to a number of new concepts.

IPv4 (Internet Protocol version 4), is a number system used for assigning unique addresses (e.g., 192.168.0.1) to devices—computers, phones, or servers—so they can find and talk to each other online. Each address is a string of 32 bits, which means there are about 4.3 billion possible combinations. Back in the 1980s, this was sufficient. But as more people and devices came online, IPv4 addresses began running out. This was already foreseen in the 1990’s and IPv6 was first introduced via the IETF taskforce in 1998 already, but adoption has been slow. By 2011, the global supply was extremely limited, and a new version was brought out (IPv6), which has enough combinations that it is highly mathematically improbable that they will ever all be used.

But IPv4 is still valuable, because there are a lot of older devices still in the global system which need them, and a very limited supply. This means they can trade for significant value.

In order to manage the supply of these addresses, and make sure that speculation by malicious market actors and political control does not distort the supply, Regional Internet Registries like AFRINIC were set up to manage them and other unique number systems critical the wellbeing of the internet.

Initially, IPv4 addresses were managed by a single entity, the Internet Assigned Numbers Authority (IANA), under U.S. oversight. As usage soared globally, the need for regional management led to ARIN’s creation in 1997 for North America, RIPE NNC for Europe in 1992, APNIC in 1993 for Asia-Pacific, and AFRINIC in 2004 for Africa.

These are nonprofit, membership-based organizations, not owned by any single entity. Members—Internet Service Providers (ISP), tech firms, or universities—pay fees based on resource use, fund operations, and vote on policies. The elected boards balance member voices, and push for a consensus. Strong valid objections can overturn majority votes, provided all parties are paying attention.

Registered in their home regions (AFRINIC in Mauritius, APNIC in Australia, ARIN in the U.S.), they operate independently but coordinate via ICANN’s Address Supporting Organization. This structure keeps them accountable to users, not governments or corporations, preserving the Internet’s decentralized ethos.

But this is not ideal if you are a rentier capitalist.

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Lu Heng

Lu Heng’s personal website sells him as a “visionary founder” and a “trailblazer”. His core business model however, is fairly simple. He rents out and “sells” IP addresses at a markup.

This business model only has value so long as the IPv4 system remains a scarce commodity. The moment it becomes truly obsolete, it evaporates. Fortunately for him, the transition to IPv6 (which is not scarce in any way) is slow. But it is also inevitable. Yet the success of the transition, and the continued value of IPv4 relies on the impartiality of the governing bodies, which protect a portion of the IPv4 register for transition purposes.

One can easily get IP addresses for commercial purposes from any RIR, you just can’t use all of them outside that region, though the precise regulations vary from one RIR to the other. With most blocks already bought up, just AFRINIC remains with a significant registry of unused numbers.

The biggest holders of IPv4 addresses are the US Department of Defence and Amazon Web Services. But these players do not hold them as a commercial commodity, but as infrastructural space, to allow for flexible use for their own purposes, allowing them to engage in data storage and device management.

Lu Heng purchased a membership from AFRINIC in 2013, the year following his graduation from the University of Groningen, for his Seychelles listed company Cloud Innovation, at a cost of $40 000. AFRINIC issues IPs on a needs-basis, and membership accords these usufruct rights; one does not “own” IP addresses.

An IP address is, after all, just a number on the central registry at ICANN which allows them to recognise and distinguish one device from another for the purposes of communication.

Somehow, Cloud Innovation convinced an administrator at AFRINIC to allocate him 6 million IPv4 addresses, an extraordinary amount for a VPN company - according to insiders, the official motivation given when Cloud Innovations signed the Registration Service Agreement (RSA) in 2013 was for the provision of VPN services to Chinese clients attempting to circumvent state censorship.

During this time, AFRINIC had a certain corruption problem - a businessman known as Ehad Cohen was allegedly working with an insider and friend of the CEO to steal a vast block of IP addresses, some of which belonged to South African companies like Woolworths, Sasol and others.

After an exposé by investigative journalist Ron Guilmette, this led to the CEO being replaced by Eddy Kayihura, who then went on a clean sweep of the organisation, investigating to determine what breeches of policy had been committed. After AFRINIC seized back the blocks that were stolen, Cohen had the gall to launch a legal injunction to retain the IPs.

It was at this point that Lu Heng’s IP usage came under scrutiny. According to AFRINIC:

“Further investigations also revealed that majority of the sample of IP addresses allocated to CIL are being used for hosting websites connected to child pornography, illegal gambling, and illegal streaming of copyrighted material. This information already forms part of AFRINIC’s case before the Supreme Court, and the matter is still pending.”

Even in 2013, IPv4 was growing scarce, and startups would not typically be given such a large block of addresses to use. Blocks are allocated based on the first section of digits - a/24 gets you 256 IPs, a /23 block gets you 512, /22 gets you 1024, and so on. Cloud Innovation got allocated almost an entire /9 block, which is almost unprecedented. Most new companies in the VPN space, or any other service provision company, get allocated no more than a /22. Known as LIRs these are entities that sub-allocate/assign Ips to end users, typically in smaller than /24 blocks at a time”.

The AFRINIC bylaws clearly stipulate that membership (and consequently use of their resources) is restricted for use within the region itself. Resource members (the membership category Cloud Innovation falls under) must comply with terms of use defined by the RSA, and this pertained to Cloud Innovation.

Yet somehow, Heng is apportioning the IPs registered under this RSA through his Hong Kong based company Larus instead, which rents and “trades” the IPs across the globe. In fact, the membership requirements in the AFRINIC bylaws explicitly rule out Lu Heng’s entire business model. The resources as per his RSA may only be used for the purpose for which it was assigned - if Lu wants to use it for a different purpose that has to be communicated with AFRINIC. Leasing is not a valid motivation since it’s not his organisation that needs the resources.

Cloud Innovation itself does not even pretend to be a VPN company anymore, and is now an empty site that simply hosts a few press releases related to Lu Heng’s battle with AFRINIC, and links to Larus, the company Lu Heng started in 2016.

Since one cannot own IP addresses, and Larus is advertising that they can sell IP addresses as if they were legal property, their business model appears to be fraudulent by definition.

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Scorched earth

Sometime in 2020, AFRINIC cottoned on to this business model, which by any commonsense reading, clearly appear to be a violation of the terms of service. In July 2021, AFRINIC issued a resolution to take back Cloud Innovation’s over 6 million IP addresses.

Rather than simply acting to preserve his core business, Heng has taken a scorched-earth strategy aimed at destroying AFRINIC. After AFRINIC claimed he violated terms of use for the IP addresses he has been hoarding, he immediately slapped them with 25 lawsuits, and several more since.

Just weeks later, Cloud Innovation convinced a judge in Mauritius to freeze $50 million in AFRINIC bank accounts, arguing that AFRINIC had “acted in bad faith and upon frivolous grounds to tarnish the reputation of Cloud Innovation,” and that it was obligated to protect its customers from disruption of service.

The Mauritian court was also strangely uninterested in any form of evidence from AFRINIC, and granted these orders ex parte - that is, without the presence or even notice given to the defendant. Whether AFRINIC was justified in seizing back control of Cloud Innovation’s IP addresses is debatable, but freezing their bank accounts and replacing its board, has meant that AFRINIC was been unable to present their case until their entire management structure was already crippled.

Why these rulings have been allowed to go ahead remains opaque, since none of these cases are available to the public online. But one possibility is that the judges simply do not understand the technical details, and their crippling of a vital element of the internet management infrastructure is perhaps a byproduct of the belief that it is simply a service enterprise like any other.

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Capture

While they were down, Lu has begun an aggressive crusade to capture the regulatory body, and not just AFRINIC, but APNIC, its Asian counterpart, too.

That financial freeze has since been partially lifted, but the court has maintained its injunction blocking AFRINIC from taking action against Cloud Innovation’s IP addresses. Cloud Innovation’s CEO is also suing the CEO and board chair of AFRINIC in an $80 million defamation case.

After a court order on the 12 September 2023, Vasoodayven Virasami was appointed receiver. But under his control, the organisation failed to process applications for assignment of IP addresses, limiting internet usage for new companies.

When Vasoodayven Virasami entered the AFRINIC offices, he was, according to insiders inexplicably accompanied by Paul Wollner, who accompanied him as an “independent” consultant. Paul Wollner was bold enough, under the guise of his South African registered company Africa on Cloud, to sue to have AFRINIC wound up under the Mauritian Insolvency Act.

How a man in the midst of a campaign to destroy AFRINIC could be found accompanying a supposedly neutral receiver into the organisation’s headquarters is a mystery.

Last month, AFRINIC won a court order forcing the substitution of the court-appointed receiver due to a failure to execute his duties. Mr. Gowtamsingh Dabee is now the newly appointed Receiver over AFRINIC. Upon Dabee’s appointment, ICANN, the highest body responsible for internet address management (including IP, email, domain names among others), wrote him an open letter explaining the importance of the organisation he was about to be custodian of, and begging him not to hurt it like his predecessor did:

“ICANN understands that under the Official Receiver, there were limitations placed on AFRINIC’s ability to perform assignments of numbering resources. ICANN, through its IANA function, has received at least one formal complaint from an applicant to AFRINIC for numbering resources stating that they have been waiting for months for any communication or assignment. ICANN understands that similar concerns have been raised on AFRINIC’s membership mailing lists.

We are hopeful that, with AFRINIC acting under your direction, AFRINIC’s assignment work can swiftly restart, so that organizations in AFRICA are no longer denied IP address space to build and grow their networks. ICANN seeks AFRINIC’s assurances that AFRINIC will return to acting in alignment with its core functions and re-start assignments of numbering resources even while work is proceeding to complete the elections for AFRINIC’s governing board by the Court’s mandate of 25 April 2025. Resource assignment is important today, and cannot wait for a period of months to restart.”

The election of the governing board which ICANN mentions there at the end is something of an important milestone. Lu Heng and Paul Wollner, who aim to pervert the aims of the RIR completely, have a plan to take it over. While Lu is rather unpopular, AFRINIC does have a few detractors, including those who remember the corruption which occurred before Eddy Kayihura started cleaning house.

But without acquiring enough support for Paul Wollner (likely Lu’s preferred candidate, given that he has campaigned for him in the past), the board would likely be composed of people dedicated to keeping his aggressive behaviour in check. Lu, accused of attempting bribery, defended himself by saying that bribery would be too expensive to carry out. But bribery would be unnecessary - there are other tactics available.

AFRINIC members are ISPs and upstream ISPs, some end-user members. Every member has equal vote, regardless of the size of their allocated block. This includes universities, banks and governments.

Wollner’s organisation, the Number Resource Society (NRS), a secretive lobby group which bills itself as an independent organisation campagning for improving the IP allocation system, to entitle for people to “own” an IP number, a free market where ISPs own and trade IP addresses like assets, reducing RIRs to mere record-keepers—a change that would benefit Cloud Innovation by eliminating AFRINIC's challenges to its operations.

They accuse internet governance organizations of wanting to "destroy the internet" for personal gain, while its own operations remain opaque. They were launched in 2021, just as Lu began his crusade, and evidence from the early stages of the project shows that Lu has been backing Wollner’s project from the beginning. Not only is Larus is a member, but older videos from home page, featured Lu himself. The NRS website also once contained another artifact linking it to Larus - the email contact for the NRS was for the Larus Foundation.

They claim to represent a number of organisations, though contacts in several of these organisations have cast doubt on the veracity of the membership they claim - including Discovery, First Rand, and a host of bush colleges from around Southern Africa.

In the build-up to the board elections, the NRS have been aggressively emailing and calling AFRINIC members, to procure power of attorney and ARINIC login details. No member who is entitled to vote during a board election shall carry more than five proxies., but with their login details, Lu and his associates could secretly vote on others’ behalf without triggering this bylaw.

While their strategy allegedly involves a number of rather underhanded tactics, the absence of publicity for this rather dry and technical part of the market means that he has managed to get away with business practices that would cause scandal if they happened in any other sector.

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Asia

Lu and Wollner’s crusade is not limited to AFRINIC, nor are the allegations of their underhanded tactics.

APNIC Election Chair, Angel Averia, President of PhCERT, who reported that the election process was successful and uncontested, with no complaints or issues reported. However, the Code of Conduct (CoC) procedures were well used, with nearly 40 complaints received prior to the close of the election. After early CoC complaints, APNIC Members were advised to beware of callers impersonating APNIC and credible reports of threatening and anonymous phone calls.

Eventually, the number of CoC complaints necessitated that APNIC EC appoint Maddocks, an Australian law firm, as CoC Chair to assess and determine the complaints received. Maddocks have provided a transparency statement regarding the number of complaints received, the number of breaches determined, and the methodology for determining those breaches. The transparency statement is now published.

The upcoming APNIC executive council election has prompted calls for urgent bylaw changes to prevent any single entity from dominating its governance. Karl Kloppenborg, an Australian telecoms engineer, has urged APNIC members to hold an extraordinary meeting to amend bylaws, limiting each company or entity to one representative on the council.

The NRS has endorsed multiple candidates for the APNIC election, including Lu himself, and advocates for privatisation, relocation to Singapore, and fee cuts. Kloppenborg hopes to delay the APNIC election through these proposed changes to safeguard its stability.

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Deadline

AFRINIC will be holding its own board election on the 25th of April.

If he succeeds, Lu Heng’s strategy could see IPv4 addresses for the African region completely taken up for the East Asian market at rates favouring him, and the permanent privatisation of one of the basic building blocks of the internet in Africa (Asia too, if his campaign there is successful).

Gaining control of APNIC and AFRINIC would allow Heng and his associates to manipulate allocation rules - say, by loosening restrictions on transfers or leasing - to favor Larus’s model, boosting profits by flooding the market with IPs under his control, scooping up massive revenue by renting them out through his main company, Larus.

Heng’s campaign would only be profitable in the long term if his aim were to commercialise the reserved addresses and prevent the IPv6 upgrade. But it would still be tremendously profitable in the short- to mid-term if he could remove regional restrictions and allow global capital to seize and trade African IP addresses as passive rentiers. Even at $1 per address, he would rake in over $6 million a year, and rates are far steeper in reality, with no meaningful overheads.

He aims to break apart the regional governance system, and create a single “unregulated” market under the guidance of his conflicted interests, could see the end of the internet as we know it, and create a new global tech giant on the back of little more than lawfare, gatekeeping and rentiership.

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