AI Due Diligence Agent for M&A with Shariah Screening
Autonomous multi-agent system covering the full M&A due diligence pipeline, including Shariah compliance verification for Islamic finance transactions.
Executive summary
An autonomous multi-agent system covering the full M&A due diligence pipeline: target sourcing, data room analysis, contractual clause extraction, risk scoring, and Shariah compliance verification for Islamic finance transactions. Designed for M&A teams handling files of 50 to 5,000 documents under time pressure.
Business problem
A standard M&A due diligence on a mid-market target requires 3 to 5 weeks of analysis by a team of 4 to 6 people. For transactions involving Islamic finance, an additional layer of manual Shariah verification is required — debt ratio screening, identification of prohibited activities (riba, gharar, maysir), validation of structures (Murabaha, Sukuk, Mudarabah) — which can double processing time and introduce interpretation inconsistencies across jurisdictions.
Solution
A multi-agent pipeline orchestrated by LangGraph: a sourcing agent continuously scans market signals, a triage agent categorises data room documents, an extraction agent identifies critical clauses (change of control, indemnities, IP), a scoring agent aggregates risks into a dashboard, and a Shariah agent verifies compliance against AAOIFI and DJIM standards. Every decision is traced, explained, and auditable.
Target KPIs
5 sem. → 4j
Average due diligence duration
100%
Document coverage (vs 5–10% manual)
60%
Shariah compliance processing reduction
< 2h
Initial scoring time on new target
Technical architecture
A pipeline of 6 orchestrated LangGraph agents. Agent 1 — Sourcing: continuous monitoring of market signals (financial databases, sector news, regulatory filings), alerts on potential targets. Agent 2 — Data room ingestion: multi-format parsing (PDF, Word, Excel, emails), OCR on scanned documents, automatic classification. Agent 3 — Contractual extraction: identification of critical clauses (change of control, indemnities, non-compete, IP), cross-contract comparison, anomaly detection. Agent 4 — Risk scoring: aggregation into a weighted score by category (financial, legal, operational, regulatory), interactive dashboard. Agent 5 — Shariah compliance: screening per AAOIFI, DJIM, FTSE Shariah, ratio verification, prohibited activity identification, Islamic structure validation. Agent 6 — Synthesis: automatic generation of the due diligence report with source citations, confidence levels, and prioritised recommendations.
General architecture
Chosen concrete stack
Competitive advantages
Market tools (Kira, Harvey, LEGALFLY) cover contractual analysis but none natively combines M&A due diligence and Shariah verification in a unified pipeline. The integration of 5 simultaneous Islamic screening methodologies (AAOIFI, DJIM, FTSE, MSCI, S&P) with full ratio traceability is unique in the European market and represents a decisive advantage on deals involving Gulf funds, Malaysian institutions, or Sukuk structures.
Risks and mitigations
Primary risk: hallucination on critical legal clauses. Mitigation: mandatory source citations on every extraction, displayed confidence score, systematic human validation on high-impact findings.
Second risk: Shariah interpretation divergence across jurisdictions (Malaysia, Gulf, Europe). Mitigation: the Shariah agent exposes all 5 methodologies simultaneously with raw ratios, the final decision remains human.
Third risk: deal data confidentiality in LLM calls. Mitigation: prompt engineering without nominal data, embedding encryption, on-premise option via Claude on AWS Bedrock.
Impact
Prototype / evaluation in progress.
Detailed impact data available on request.
Project scope
Pilot scope: 1 mid-market deal, corpus of 500 to 2,000 documents, including 20 to 50 contracts with Shariah clauses. POC duration: 8 weeks. Constraints: absolute deal data confidentiality, per-transaction isolation, regulatory audit trail. Compliance: GDPR, EU-hosted data, end-to-end encryption, role-based access per deal team.
Hosting and resilience
AWS eu-west-3 infrastructure for EU data residency. Full per-deal isolation: each transaction in a dedicated Supabase namespace with RLS. Target availability: 99.5% during the active deal period. Automatic data purge 90 days post-closing. Degraded mode: non-critical agents deactivate without blocking the main pipeline.
Role
Architecture multi-agent, Shariah compliance design, LangGraph orchestration, security review
Tech stack
Timeline
S1–S2
Ingestion
Data room ingestion and OCR pipeline
S3–S4
Extraction
Extraction agents and risk scoring
S5–S6
Shariah
Shariah agent and LangGraph orchestration
S7–S8
Production
Dashboard, audit trail, live deal test