It depends upon the service contract between your former company and you. If the contract permits then your wife can do business with clients of the former company.
When the terms and conditions of the contract prohibits an ex-employee to do business with its clients for a certain period then after expiry of that period you or your wife can start a business with those clients.
If there is a complete embargo on the ex-employee in respect of business with the clients of the former company that embargo is void and illegal.
If your wife has special skill and is doing business with the clients of your former company without your favour or influence then it is legal however, some contradictory provisions have been made in your service contract. Your former company cannot initiate any legal action against your wife because it does not constitute a breach of service contract.
