I could be mistaken, but I think that System Managers are more about accessing the Admin console than about accessing the repository - kind of a default admin if no one else has permissions.

In order to grant the repository access, you'll need to add them to Users and Groups - likely under "Windows Accounts" since you mentioned they are AD users (we are using LFDS and AD users and this is where we add them).  You'll need to either assign them to groups that include the desired access rights or add those rights impliciently to the specific user.

Edit to add that I'm looking at my system on version 11, so there might be some differences with 9.2.