There is black tape at the bottom, but not at the sides or top.
Ignore Koreader (though I am using the latest build, 479), because all this is happening in the Home screen of Kobo, i.e. not with 3rd party applications.
UPDATE: Should that black tape be removed?
UPDATE: the brightness is set to various values (from 0 to 100%) with none of them working.
UPDATE: Ironically, it was me who always criticized the idea of "eInk with backlight" and I always wanted more storage. So now I got what I want --- LOADS of storage (64GB in total) but no light. The only worrying thing is that the top right corner IR sensors are not working, so I can't come out of Settings other than via reboot. I hope koreader doesn't need top right corner for any functionality