Incidents like this are starting to pop up all over...been a few in Suzhou, too.
It's one reason I'm so shrill and dogmatic and generally un-fun about getting a residence permit if you're going to teach here. This stuff really does happen.
Unfortunately, it's hard to tell what's behind this...it's hard to tell how much is genuinely a crackdown on illegal schools, and how much of it is just the schools that ARE tight with the local police shutting down unwanted competition that's NOT tight with the police...
How can you tell if a school is illegal?
Simple.
If a school hires foreign workers, but is unable (unable, not unwilling) to give full-time foreign workers a residence permit, it's illegal.
And it's very, very common.
Please: always have one job that will give you a residence permit. A FULL-TIME job that can't or won't do this for you is NOT a good deal.